Proficient Auto Logistics, Inc 8-K/A, filed Oct 23, 2026
Proficient Auto Logistics, Inc (PAL)
About this 8-K/A
Proficient Auto Logistics, Inc filed this 8-K/A on October 23, 2026, reporting on events of August 13, 2026.
Proficient Auto Logistics completed its previously announced acquisition on August 13, 2026 and supplied financial statements and pro forma information for Hansen & Adkins, MCL McGill Carriers Ltd., and the combined company. AI summary
Items reported
- Item 9.01: Financial statements and exhibits
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
CURRENT REPORT
Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
Date of report (date of earliest event reported):
(Exact name of registrant as specified in its charter)
| (State or other jurisdiction of incorporation) |
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area code: (
Check the appropriate box below if the Form 8-K is intended to simultaneously satisfy the filing obligations of the registrant under any of the following provisions:
| Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
| Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
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
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Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||
Explanatory Note
The pro forma financial information included in this Amendment No. 1 is presented for
informational purposes only, as required by Form 8-K. It is not intended to represent the results of operations that PAL and the
acquired businesses would have achieved had the Acquisition and related financing transactions occurred during the periods
presented, nor is it intended to project the future results of operations of the combined company.
1
Item 9.01 Financial Statements and Exhibits.
(a) Financial Statements of Business Acquired
The audited consolidated financial statements of Hansen & Adkins, Inc. and Subsidiaries, which include H&A as of and for the years ended December 31, 2025 and 2024, together with the related independent auditor’s report of Windes, Inc., are filed as Exhibit 99.3 hereto and incorporated herein by reference. The unaudited condensed consolidated financial statements of Hansen & Adkins, Inc. and Subsidiaries as of June 30, 2026 and for the six months ended June 30, 2026 and 2025 are filed as Exhibit 99.4 hereto and incorporated herein by reference.
The audited financial statements of MCL McGill Carriers Ltd. as of and for the years ended December 31, 2025 and 2024, prepared in accordance with accounting principles generally accepted in the United States, together with the related independent auditor’s report of Grant Thornton LLP, are filed as Exhibit 99.5 hereto and incorporated herein by reference. The unaudited condensed financial statements of MCL as of June 30, 2026 and for the six months ended June 30, 2026 and 2025 are filed as Exhibit 99.6 hereto and incorporated herein by reference. For purposes of the unaudited pro forma condensed combined financial information, MCL’s historical financial information is presented under the caption “H&A Canada.”
(b) Pro Forma Financial Information
The unaudited pro forma condensed combined balance sheet of PAL as of June 30, 2026, giving effect to the Acquisition and the related financing transactions as if they had occurred on June 30, 2026, and the unaudited pro forma condensed combined statements of operations of PAL for the year ended December 31, 2025 and the six months ended June 30, 2026, in each case giving effect to the Acquisition and the related financing transactions as if they had occurred on January 1, 2025, are filed as Exhibit 99.7 hereto and incorporated herein by reference.
(d) Exhibits
2
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
Date: October 23, 2026
| By: | /s/ Brad Wright | |
| Brad Wright | ||
| Chief Financial Officer and Secretary |
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Exhibit 23.1
CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
We have issued our report dated April 13, 2026, with respect to the financial statements of Hansen & Adkins, Inc. and subsidiaries as of and for the years ended December 31, 2025, and 2024 and the notes thereto, which report appears in this Form 8-K/A of Proficient Auto Logistics, Inc. We consent to the incorporation by reference of said report in the registration statement of Proficient Auto Logistics, Inc. on Form S-8 (File No. 333-279346).
/s/ Windes, Inc.
Windes, Inc.
Long Beach, California
October 23, 2026
Exhibit 23.2
CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
We have issued our report dated October 23, 2026, with respect to the financial statements of MCL McGill Carriers Ltd. as of and for the years ended December 31, 2025, and 2024 and the notes thereto, which report appears in this Form 8-K/A of Proficient Auto Logistics, Inc. We consent to the incorporation by reference of said report in the registration statement of Proficient Auto Logistics, Inc. on Form S-8 (File No. 333-279346).
/s/ GRANT THORNTON LLP
Tulsa, Oklahoma
October 23, 2026
Exhibit 99.3
HANSEN & ADKINS, INC. AND SUBSIDIARIES
CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER
31, 2025 AND 2024
TABLE OF CONTENTS
i
To the Stockholders of
Hansen & Adkins, Inc. and subsidiaries:
Opinion
We have audited the accompanying consolidated financial statements of Hansen & Adkins, Inc. and its subsidiaries, which comprise the consolidated balance sheets as of December 31, 2025 and 2024, the related consolidated statements of operations, changes in stockholders’ equity, and cash flows for the years then ended, and the related notes to the consolidated financial statements.
In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of Hansen & Adkins, Inc. and its subsidiaries (the Company) as of December 31, 2025 and 2024, and the results of its operations and its cash flows for the years then ended in accordance with accounting principles generally accepted in the United States of America.
Basis for Opinion
We conducted our audits in accordance with auditing standards generally accepted in the United States of America. Our responsibilities under those standards are further described in the Auditors’ Responsibilities for the Audit of the Consolidated Financial Statements section of our report. We are required to be independent of the Company and to meet our other ethical responsibilities in accordance with the relevant ethical requirements relating to our audits. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.
Responsibilities of Management for the Consolidated Financial Statements
Management is responsible for the preparation and fair presentation of the consolidated financial statements in accordance with accounting principles generally accepted in the United States of America, and for the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of consolidated financial statements that are free from material misstatement, whether due to fraud or error.
In preparing the consolidated financial statements, management is required to evaluate whether there are conditions or events, considered in the aggregate, that raise substantial doubt about the Company’s ability to continue as a going concern within one year after the date that the consolidated financial statements are available to be issued.
Auditors’ Responsibilities for the Audit of the Consolidated Financial Statements
Our objectives are to obtain reasonable assurance about whether the consolidated financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditors’ report that includes our opinion. Reasonable assurance is a high level of assurance but is not absolute assurance and, therefore, is not a guarantee that an audit conducted in accordance with generally accepted auditing standards will always detect a material misstatement when it exists. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. Misstatements are considered material if there is a substantial likelihood that, individually or in the aggregate, they would influence the judgment made by a reasonable user based on the consolidated financial statements.
In performing an audit in accordance with generally accepted auditing standards, we:
| ● | Exercise professional judgment and maintain professional skepticism throughout the audit. |
| ● | Identify and assess the risks of material misstatement of the consolidated financial statements, whether due to fraud or error, and design and perform audit procedures responsive to those risks. Such procedures include examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. |
| ● | Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control. Accordingly, no such opinion is expressed. |
| ● | Evaluate the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluate the overall presentation of the consolidated financial statements. |
| ● | Conclude whether, in our judgment, there are conditions or events, considered in the aggregate, that raise substantial doubt about the Company’s ability to continue as a going concern for a reasonable period of time. |
We are required to communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit, significant audit findings, and certain internal control-related matters that we identified during the audit.
/s/ Windes, Inc.
Long Beach, California
April 13, 2026
1
HANSEN & ADKINS, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
| December 31, | ||||||||
| 2025 | 2024 | |||||||
| ASSETS | ||||||||
| CURRENT ASSETS | ||||||||
| Cash and cash equivalents (variable interest entity restricted: $1,743,251 - 2025; $2,922,411 - 2024) | $ | 17,551,850 | $ | 18,650,798 | ||||
| Accounts receivable, net of allowance for credit losses of $654,890 - 2025; $205,483 - 2024 | 25,241,990 | 26,496,499 | ||||||
| Prepaid expenses and other current assets | 6,287,592 | 3,957,266 | ||||||
| Due from stockholders | 633,830 | 622,035 | ||||||
| Notes receivable, current portion (variable interest entity restricted: $532,365 - 2025; $836,769 - 2024) | 908,327 | 1,486,994 | ||||||
| 50,623,589 | 51,213,592 | |||||||
| PROPERTY AND EQUIPMENT, net (variable interest entity restricted: $50,731,727 - 2025; $23,508,114 - 2024) | 52,105,596 | 24,841,306 | ||||||
| OTHER ASSETS | ||||||||
| Notes receivable, noncurrent portion (variable interest entity restricted: $315,284 - 2025; $884,693 - 2024) | 4,820,848 | 5,627,140 | ||||||
| Deposits | 574,330 | 527,179 | ||||||
| 5,395,178 | 6,154,319 | |||||||
| TOTAL ASSETS | $ | 108,124,363 | $ | 82,209,217 | ||||
| LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||
| CURRENT LIABILITIES | ||||||||
| Accounts payable | $ | 7,331,798 | $ | 16,573,264 | ||||
| Accrued expenses, current portion | 16,253,987 | 17,478,142 | ||||||
| Notes payable, current portion (variable interest entity nonrecourse: $10,975,544 - 2025; $6,536,316 - 2024) | 13,121,577 | 7,086,981 | ||||||
| 36,707,362 | 41,138,387 | |||||||
| NONCURRENT LIABILITIES | ||||||||
| Accrued expenses, noncurrent portion | 8,915,072 | 9,390,747 | ||||||
| Notes payable, noncurrent portion (variable interest entity nonrecourse: $43,846,087 - 2025; $20,660,454 - 2024) | 50,327,665 | 26,208,497 | ||||||
| 59,242,737 | 35,599,244 | |||||||
| COMMITMENTS AND CONTINGENCIES (Notes 1, 8, and 9) | ||||||||
| STOCKHOLDERS’ EQUITY | ||||||||
| Common stock, no par value; 1,000 shares authorized, issued, and outstanding | 120,000 | 120,000 | ||||||
| Additional paid-in capital | 20,915,648 | 20,915,648 | ||||||
| Accumulated deficit | (28,169,698 | ) | (34,940,785 | ) | ||||
| Stockholders’ deficit attributable to Hansen & Adkins, Inc. | (7,134,050 | ) | (13,905,137 | ) | ||||
| Noncontrolling interest | 19,308,314 | 19,376,723 | ||||||
| Total Stockholders’ Equity | 12,174,264 | 5,471,586 | ||||||
| TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY | $ | 108,124,363 | $ | 82,209,217 | ||||
The accompanying notes are an integral part of these consolidated financial statements.
2
HANSEN & ADKINS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
| For the Year Ended | ||||||||
| December 31, | ||||||||
| 2025 | 2024 | |||||||
| SALES | $ | 345,203,677 | $ | 317,111,314 | ||||
| COST OF SALES | 298,616,835 | 274,990,018 | ||||||
| GROSS PROFIT | 46,586,842 | 42,121,296 | ||||||
| OPERATING EXPENSES | ||||||||
| General and administrative expenses | 39,441,417 | 34,877,015 | ||||||
| Gain on sale of property and equipment | (2,153,327 | ) | (1,141,417 | ) | ||||
| 37,288,090 | 33,735,598 | |||||||
| INCOME FROM OPERATIONS | 9,298,752 | 8,385,698 | ||||||
| OTHER INCOME (EXPENSE) | ||||||||
| Other income (expense) | 1,491,830 | (10,804,797 | ) | |||||
| Interest expense | (3,728,335 | ) | (1,902,632 | ) | ||||
| Interest income | 541,893 | 710,709 | ||||||
| (1,694,612 | ) | (11,996,720 | ) | |||||
| INCOME (LOSS) BEFORE (BENEFIT FROM) PROVISION FOR STATE TAXES | 7,604,140 | (3,611,022 | ) | |||||
| (BENEFIT FROM) PROVISION FOR STATE TAXES | (254,484 | ) | 298,889 | |||||
| NET INCOME (LOSS) | 7,858,624 | (3,909,911 | ) | |||||
| LESS: INCOME ATTRIBUTABLE TO NONCONTROLLING INTEREST | 1,009,347 | 493,578 | ||||||
| NET INCOME (LOSS) ATTRIBUTABLE TO HANSEN & ADKINS, INC. | $ | 6,849,277 | $ | (4,403,489 | ) | |||
The accompanying notes are an integral part of these consolidated financial statements.
3
HANSEN & ADKINS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CHANGES IN
STOCKHOLDERS’ EQUITY
FOR THE YEARS ENDED DECEMBER 31, 2025 AND 2024
| Stockholders’ | ||||||||||||||||||||||||
| Deficit | ||||||||||||||||||||||||
| Additional | Attributable to | |||||||||||||||||||||||
| Common | Paid-In | Accumulated | Hansen & | Noncontrolling | ||||||||||||||||||||
| Stock | Capital | Deficit | Adkins, Inc. | Interest | Total | |||||||||||||||||||
| BALANCE AT JANUARY 1, 2024 | $ | 120,000 | $ | 20,915,648 | $ | (23,803,184 | ) | $ | (2,767,536 | ) | $ | 21,390,243 | $ | 18,622,707 | ||||||||||
| DISTRIBUTIONS TO STOCKHOLDERS | - | - | (6,734,112 | ) | (6,734,112 | ) | (2,507,098 | ) | (9,241,210 | ) | ||||||||||||||
| NET (LOSS) INCOME | - | - | (4,403,489 | ) | (4,403,489 | ) | 493,578 | (3,909,911 | ) | |||||||||||||||
| BALANCE AT DECEMBER 31, 2024 | 120,000 | 20,915,648 | (34,940,785 | ) | (13,905,137 | ) | 19,376,723 | 5,471,586 | ||||||||||||||||
| DISTRIBUTIONS TO STOCKHOLDERS | - | - | (78,190 | ) | (78,190 | ) | (1,077,756 | ) | (1,155,946 | ) | ||||||||||||||
| NET INCOME | - | - | 6,849,277 | 6,849,277 | 1,009,347 | 7,858,624 | ||||||||||||||||||
| BALANCE AT DECEMBER 31, 2025 | $ | 120,000 | $ | 20,915,648 | $ | (28,169,698 | ) | $ | (7,134,050 | ) | $ | 19,308,314 | $ | 12,174,264 | ||||||||||
The accompanying notes are an integral part of these consolidated financial statements.
4
HANSEN & ADKINS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
| For the Year Ended | ||||||||
| December 31, | ||||||||
| 2025 | 2024 | |||||||
| CASH FLOWS FROM OPERATING ACTIVITIES | ||||||||
| Net income (loss) | $ | 7,858,624 | $ | (3,909,911 | ) | |||
| Adjustments to reconcile net income (loss) to net cash from operating activities: | ||||||||
| Depreciation and amortization | 10,210,520 | 9,015,638 | ||||||
| Gain on sale of property and equipment | (2,153,327 | ) | (1,141,417 | ) | ||||
| Changes in operating assets and liabilities: | ||||||||
| Accounts receivable | 1,254,509 | 1,203,925 | ||||||
| Prepaid expenses and other current assets | (2,330,326 | ) | (927,193 | ) | ||||
| Deposits | (47,151 | ) | 4,761 | |||||
| Accounts payable and accrued expenses | (10,941,296 | ) | 8,587,392 | |||||
| Net Cash Provided By Operating Activities | 3,851,553 | 12,833,195 | ||||||
| CASH FLOWS FROM INVESTING ACTIVITIES | ||||||||
| Repayments on notes receivable | 1,384,959 | 1,992,068 | ||||||
| (Advances to) repayments from stockholders | (11,795 | ) | 325,120 | |||||
| Purchases of property and equipment | (450,435 | ) | (193,096 | ) | ||||
| Proceeds from sale of property and equipment | 2,153,327 | 1,171,394 | ||||||
| Net Cash Provided By Investing Activities | 3,076,056 | 3,295,486 | ||||||
| CASH FLOWS FROM FINANCING ACTIVITIES | ||||||||
| Repayments on notes payable | (9,445,611 | ) | (7,747,797 | ) | ||||
| Borrowings of notes payable | 2,575,000 | 5,500,000 | ||||||
| Members’ distributions | (1,077,756 | ) | (2,507,098 | ) | ||||
| Stockholders’ distributions | (78,190 | ) | (6,734,112 | ) | ||||
| Net Cash Used In Financing Activities | (8,026,557 | ) | (11,489,007 | ) | ||||
| NET CHANGE IN CASH AND CASH EQUIVALENTS | (1,098,948 | ) | 4,639,674 | |||||
| CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR | 18,650,798 | 14,011,124 | ||||||
| CASH AND CASH EQUIVALENTS, END OF YEAR | $ | 17,551,850 | $ | 18,650,798 | ||||
The accompanying notes are an integral part of these consolidated financial statements.
5
HANSEN & ADKINS, INC. AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31, 2025 AND 2024
NOTE 1 – Summary of Significant Accounting Policies
Nature of Business
Hansen & Adkins, Inc. (Hansen & Adkins) was incorporated under the laws of the state of California to provide vehicle transportation and related services throughout the United States. Hansen & Adkins was formed in April 1994.
Basis of Accounting
The accompanying consolidated financial statements have been prepared on the accrual basis in accordance with accounting principles generally accepted in the United States of America (U.S. GAAP).
Consolidation of Subsidiaries
These consolidated financial statements include the accounts of Hansen & Adkins and its wholly owned subsidiaries, Hansen & Adkins Auto Transport, Inc. (H&A Auto Transport), Hansen & Adkins Auto Logistics, Inc. (H&A Auto Logistics), and Royal Truck Leasing, LLC (Royal), a variable interest entity, (collectively, the Company). All significant intercompany balances and transactions have been eliminated in consolidation.
Use of Estimates and Assumptions
The preparation of the consolidated financial statements, in accordance with accounting principles generally accepted in the United States of America (U.S. GAAP), requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities, and the reported amounts of revenues and expenses. Significant items subject to such estimates and assumptions include valuation of accounts receivable, the useful lives of property and equipment, accrued expenses, including damage claims, and accrued workers’ compensation. Actual results could differ from those estimates.
Cash and Cash Equivalents
For the purposes of the consolidated balance sheets and consolidated statements of cash flows, the Company considers cash on hand and all highly liquid debt instruments purchased with original maturities of three months or less to be cash and cash equivalents.
6
HANSEN & ADKINS, INC. AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31, 2025 AND 2024
NOTE 1 – Summary of Significant Accounting Policies (Continued)
Accounts Receivable
The Company extends credit to its customers in the ordinary course of business and mitigates related credit risk by actively pursuing past due accounts. The Company measures expected credit losses on a collective basis when similar characteristics exist using historical experience, current economic conditions, credit ratings, and other relevant factors in its credit estimation process and provides for probable uncollectible amounts through a charge to earnings and a credit to an allowance for credit losses based on its assessment.
Balances that are still outstanding after management has made reasonable collection efforts are written off through a charge to the allowance for credit losses and a credit to accounts receivable. The Company maintained an allowance for credit losses of $654,890 and $205,483 at December 31, 2025 and 2024, respectively. The Company recognized credit loss expenses of $1,440,000 and $456,000 during the years ended December 31, 2025 and 2024, respectively.
In July 2025, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2025-05, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses for Accounts Receivable and Contract Assets. The guidance introduces a practical expedient and an accounting policy election that simplify the application of the current expected credit loss (CECL) model for current accounts receivable and current contract assets arising from revenue transactions accounted for under Accounting Standards Codification (ASC) 606, Revenue from Contracts with Customers.
The amendments allow all entities to elect a practical expedient under which current conditions as of the consolidated balance sheet date are assumed not to change over the remaining life of the asset, eliminating the need to develop and document reasonable and supportable forecasts when estimating expected credit losses for assets within the scope of the guidance. In addition, entities other than public business entities may elect an accounting policy to consider collection activity occurring after the consolidated balance sheet date but before the consolidated financial statements are available to be issued when estimating expected credit losses.
Management has elected early adoption of ASU 2025-05 during the current reporting period. The adoption was applied prospectively, as required by the standard. Upon adoption, management elected the practical expedient to assume that current conditions as of December 31, 2025 remain unchanged for the remaining life of accounts receivable. Management has also elected the accounting policy to consider subsequent collection activity through April 13, 2026 when estimating expected credit losses. Accounts receivable collected prior to that date are excluded from the allowance for credit losses. The adoption of ASU 2025-05 did not have a material impact on the Company’s financial position or results of operations.
7
HANSEN & ADKINS, INC. AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31, 2025 AND 2024
NOTE 1 – Summary of Significant Accounting Policies (Continued)
Concentration of Business and Credit Risk
The Company maintains its cash and cash equivalents at major financial institutions in deposit accounts insured by the Federal Deposit Insurance Corporation. At times, such amounts may exceed federally insured limits. The Company has not experienced any losses in such accounts and believes it is not exposed to any significant credit risk.
The Company’s business is concentrated in the transportation of automobiles and related services;
therefore, the performance of the Company could be affected by industry trends.
Three customers comprised approximately 55% and 51% of total sales during the years ended December 31, 2025 and 2024, respectively. These customers represented approximately 50% and 49% of total accounts receivable at December 31, 2025 and 2024, respectively.
Property and Equipment
Property and equipment items are stated at cost. Depreciation is computed on a straight-line basis over the estimated useful lives of the related assets, which range from three to seven years. Leasehold improvements are amortized using the straight-line method over the shorter of their estimated useful lives or the lease term. Expenditures for maintenance and repairs are expensed as incurred, and expenditures that increase the value or productive capacity of assets are capitalized.
Impairment of Long-Lived Assets
Long-lived assets, such as property and equipment, are reviewed for impairment whenever events or changes in circumstances indicate that their carrying amounts may not be recoverable. Recoverability of assets is measured by comparison of the carrying amount of the asset to the net undiscounted future cash flows expected to be generated from the asset. If the future undiscounted cash flows are not sufficient to recover the carrying value of the asset, the asset’s carrying value is adjusted to fair value. To date, no impairment has been recorded.
Fair Value of Financial Instruments
Financial instruments primarily consist of accounts receivable, accounts payable, accrued expenses, and notes payable. The fair value of accounts receivable, accounts payable, and accrued expenses closely approximates their carrying value due to their short-term maturities. The carrying amounts of substantially all of the Company’s outstanding notes payable approximate fair value because their interest rates are based on variable reference rates or rates approximating those currently available to the Company for debt with similar terms.
8
HANSEN & ADKINS, INC. AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31, 2025 AND 2024
NOTE 1 – Summary of Significant Accounting Policies (Continued)
Accrued Workers’ Compensation
The Company carries insurance policies to cover various risks, primarily general liability and workers’ compensation, under which the Company is liable to reimburse the insurance carrier for a portion of each claim paid. The Company is self-insured for the first $250,000 of each workers’ compensation claim. The Company has accrued a liability for all known claims, as well as those that are incurred but not reported.
Revenue Recognition
The Company primarily derives its revenue from vehicle transportation and related services.
Revenue from contracts with customers is recognized over time as services are performed, as control is continuously transferred to the customer and the customer simultaneously receives and consumes the benefits of the services. Revenue is measured as the amount of total consideration expected to be received in exchange for providing services.
A performance obligation is a promise in a contract to transfer a distinct good or service to the customer and is defined as the unit of account. For all contracts with customers, the Company contracts to provide distinct services for an established rate, such as the movement of an automobile from a port of entry to a dealership. For any contracts with multiple performance obligations, the transaction price is allocated to each performance obligation based on the relative standalone selling price of each distinct service in the contract. The relative standalone selling price of each distinct service is generally observable as they are described in each contract. None of the Company’s contracts contain volume-based discounts.
Contract assets relate to the Company’s right to payments for performance completed to date under a contract. Accounts receivable are recorded when the right to payment becomes unconditional.
Contract liabilities relate to payments received in advance of performance under a contract. The Company has no contract liabilities at December 31, 2025 or 2024.
A summary of accounts receivable is as follows:
| December 31, | December 31, | January 1, | ||||||||||
| 2025 | 2024 | 2024 | ||||||||||
| Accounts receivable, net | $ | 25,241,990 | $ | 26,496,499 | $ | 27,700,424 | ||||||
9
HANSEN & ADKINS, INC. AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31, 2025 AND 2024
NOTE 1 – Summary of Significant Accounting Policies (Continued)
Revenue Recognition (Continued)
The following table presents disaggregated sales recognized by geographic area:
| For the Year Ended | ||||||||
| December 31, | ||||||||
| 2025 | 2024 | |||||||
| East | $ | 126,109,762 | $ | 125,420,016 | ||||
| North | 92,505,091 | 68,688,306 | ||||||
| West | 126,588,824 | 123,002,992 | ||||||
| $ | 345,203,677 | $ | 317,111,314 | |||||
Variable Interest Entities
Hansen & Adkins consolidates the assets, liabilities, and results of operations of variable interest entities (VIEs) for which it is the primary beneficiary. Hansen & Adkins has determined that Royal is a VIE for which it is the primary beneficiary and, accordingly, has consolidated Royal in its financial statements as of and for the years ended December 31, 2025 and 2024.
As a limited liability company (LLC), the members of Royal are not personally liable for the debts, obligations, or liabilities of Royal. The liabilities of Royal consolidated by Hansen & Adkins do not represent additional claims on Hansen & Adkins’ general assets; rather, they represent claims against specific assets of Royal. Likewise, the assets of Royal consolidated by Hansen & Adkins do not represent additional assets available to satisfy the claims against Hansen & Adkins’ general liabilities.
Income Taxes
The Company’s stockholders have elected to be taxed as an S corporation for federal and state tax purposes and, as such, the income is taxed directly to the stockholders. There is a 1.5% California franchise tax charged at the corporate level. The Company operates in other state tax jurisdictions that may not recognize S corporation status, resulting in tax being assessed to the Company.
10
HANSEN & ADKINS, INC. AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31, 2025 AND 2024
NOTE 1 – Summary of Significant Accounting Policies (Continued)
Income Taxes (Continued)
Income taxes are not provided for Royal, since taxable earnings or losses of an LLC are reported by, and are the responsibility of, individual members.
The Company recognizes the effect of income tax positions taken or expected to be taken in a tax return only if those positions are more likely than not of being sustained. Recognized income tax positions are measured at the largest amount that is greater than 50% likely of being realized. Changes in recognition or measurement are reflected in the period in which the change in judgment occurs.
The Company’s income tax filings are subject to audit by various taxing authorities. The Company’s open audit periods are generally three and four years for federal and state tax filings, respectively.
Leasing Arrangements
The Company determines if an arrangement contains a lease at inception based on whether the Company has the right to control the asset during the contract period and other facts and circumstances.
The Company’s policy for determining its lease discount rate used for measuring lease liabilities is to use the rate implicit in the lease whenever that rate is readily determinable. If the rate implicit in the lease is not readily determinable, then the Company has elected to use the risk-free discount rate, as permitted by U.S. GAAP, determined using a period comparable with that of the lease term.
The Company has elected a policy to account for short-term leases, defined as any lease with a term less than 12 months, by recognizing all components of the lease payment in the consolidated statements of operations in the period in which the obligation for the payments is incurred.
The Company has evaluated all lease arrangements and determined that they’ve met the definition of short-term leases or are below its capitalization policy.
11
HANSEN & ADKINS, INC. AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31, 2025 AND 2024
NOTE 1 – Summary of Significant Accounting Policies (Continued)
Common Control Leasing Arrangements
Accounting Standards Update (ASU) 2023-01, Leases, the updated guidance on common control leasing arrangements, permits a private company lessee (the reporting entity) to elect an accounting alternative not to apply VIE guidance to a commonly controlled lessor entity if (a) the private company lessee and the lessor entity are under common control, (b) the private company lessee has a lease arrangement with the lessor entity, (c) substantially all of the activities between the private company lessee and the lessor entity are related to leasing activities (including supporting leasing activities) between those two entities, and (d) if the private company lessee explicitly guarantees or provides collateral for any obligation of the lessor entity related to the asset leased by the private company, and the principal amount of the obligation at inception of such guarantee or collateral arrangement does not exceed the value of the asset leased by the private company from the lessor entity. The Company has elected not to apply VIE guidance to Farquhar Investments, LLC (Farquhar), a commonly controlled lessor (see Note 8). The Company has determined that the leasing arrangement with Farquhar meets the established criteria in the updated guidance and falls under its short-term lease policy election.
Insurance Financing Arrangements
The Company entered into various arrangements to finance certain business insurance premiums, which require payments of up to $327,373 and expire at various dates through June 2026. As of December 31, 2025 and 2024, amounts outstanding under these arrangements totaled $2,239,733 and $1,758,589, respectively, and are included in accrued expenses on the consolidated balance sheets.
Reclassifications
Certain amounts related to the prior year consolidated financial statements have been reclassified to conform to the current year consolidated financial statement presentation.
Subsequent Events
Management has evaluated subsequent events from the date of the consolidated balance sheets through April 13, 2026, the date the consolidated financial statements were available to be issued and determined there were no items to disclose.
12
HANSEN & ADKINS, INC. AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31, 2025 AND 2024
NOTE 2 – Prepaid Expenses and Other Current Assets
Prepaid expenses and other current assets consist of the following:
| December 31, | ||||||||
| 2025 | 2024 | |||||||
| Prepaid insurance | $ | 2,505,319 | $ | 2,363,613 | ||||
| Other receivables | 2,583,558 | 185,628 | ||||||
| Prepaid licenses and registrations | 758,663 | 970,338 | ||||||
| Other | 440,052 | 437,687 | ||||||
| $ | 6,287,592 | $ | 3,957,266 | |||||
NOTE 3 – Notes Receivable
Notes receivable consist of the following:
| December 31, | ||||||||
| 2025 | 2024 | |||||||
| Related Parties | ||||||||
| Noninterest-bearing notes receivable from Hansen & Adkins Canada, Ltd. (H&A Canada), a related entity that is owned by the owners of the Company, payable upon demand with repayment not expected in the near future | $ | 2,512,919 | $ | 2,510,435 | ||||
| Note receivable from Farquhar, a related entity that is owned by the owners of the Company, payable in monthly installments of $27,306, including interest at 6.00%, maturing in June 2035 | 2,368,607 | 2,882,237 | ||||||
| Interest-bearing notes receivable from a related entity that is owned by the owners of the Company, from the sale of equipment, due in monthly installments, including interest at 7.7%, with maturities at various dates through September 2027 | 552,112 | 835,864 | ||||||
13
HANSEN & ADKINS, INC. AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31, 2025 AND 2024
NOTE 3 – Notes Receivable (Continued)
| December 31, | ||||||||
| 2025 | 2024 | |||||||
| Other | ||||||||
| Notes receivable from the sale of equipment, due in monthly installments, including interest at rates ranging from 7.5% to 8.0%, with maturities at various dates through September 2027 | 295,537 | 885,598 | ||||||
| 5,729,175 | 7,114,134 | |||||||
| Less current portion | (908,327 | ) | (1,486,994 | ) | ||||
| Noncurrent portion | $ | 4,820,848 | $ | 5,627,140 | ||||
NOTE 4 – Property and Equipment
Property and equipment consist of the following:
| December 31, | ||||||||
| 2025 | 2024 | |||||||
| Tractors and trailers | $ | 118,436,225 | $ | 84,074,982 | ||||
| Computer equipment | 1,795,372 | 1,672,447 | ||||||
| Service cars and equipment | 1,391,848 | 1,458,972 | ||||||
| Office furniture | 254,694 | 254,694 | ||||||
| Buildings and leasehold improvements | 794,769 | 591,851 | ||||||
| 122,672,908 | 88,052,946 | |||||||
| Less accumulated depreciation and amortization | (70,773,010 | ) | (63,417,338 | ) | ||||
| 51,899,898 | 24,635,608 | |||||||
| Land | 205,698 | 205,698 | ||||||
| $ | 52,105,596 | $ | 24,841,306 | |||||
Depreciation and amortization expense for the years ended December 31, 2025 and 2024 totaled $10,210,520 and $9,015,638, respectively.
14
HANSEN & ADKINS, INC. AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31, 2025 AND 2024
NOTE 5 – Accrued Expenses
Accrued expenses consist of the following:
| December 31, | ||||||||
| 2025 | 2024 | |||||||
| Damage and accident claims | $ | 14,232,367 | $ | 13,676,645 | ||||
| Workers’ compensation | 2,045,473 | 4,439,971 | ||||||
| Payroll and related liabilities | 4,247,712 | 4,843,490 | ||||||
| Insurance financing | 2,239,733 | 1,758,589 | ||||||
| Owner operators’ escrow | 1,527,438 | 1,350,261 | ||||||
| Health insurance | 717,869 | 576,911 | ||||||
| Other | 158,467 | 223,022 | ||||||
| $ | 25,169,059 | $ | 26,868,889 | |||||
NOTE 6 – Line of Credit
The Company entered into a line of credit agreement with a bank whereby the Company may borrow up to $20 million. Outstanding balances under this agreement incur interest at the Prime Rate. As of December 31, 2025, there were no amounts outstanding under this line of credit, and the Company had outstanding standby letters of credit of approximately $5,300,000. The agreement contains certain restrictive covenants, required financial reporting, and was secured by substantially all of the Company’s assets. The Company was in compliance with these covenants as of December 31, 2025. This credit agreement matures in August 2028.
The agreement allows for two term loans, Term Loan A and Term Loan B, in addition to the line of credit. Term Loan A and Term Loan B are subject to restrictions and allow for principal balances up to $6 million and $10 million, respectively. As of December 31, 2025, there was $3,300,000 outstanding under Term Loan A and $8,075,000 outstanding under Term Loan B. The interest rates charged under each loan depend on certain criteria as determined by the agreement.
15
HANSEN & ADKINS, INC. AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31, 2025 AND 2024
NOTE 7 – Notes Payable
Notes payable consist of the following:
| December 31, | ||||||||
| 2025 | 2024 | |||||||
| Notes payable to a financial institution, secured by related equipment of the noncontrolling interest, payable in monthly installments of $28,824, including interest at 6.03%, with maturities at various dates through March 2030 | $ | 1,293,729 | $ | - | ||||
| Notes payable to a financial institution, secured by related equipment of the noncontrolling interest, payable in monthly installments of $331,519, including interest at rates ranging from 6.37% to 7.59%, with maturities at various dates through May 2031 | 16,637,086 | 11,026,161 | ||||||
| Note payable (Term Loan A) to a financial institution, secured by related equipment of the noncontrolling interest, payable in monthly installments of $100,000, including interest at 9.00%, maturing in December 2028 | 3,300,000 | 4,500,000 | ||||||
| Note payable (Term Loan B) to a financial institution, secured by related equipment of the noncontrolling interest, including interest at 9.00%, and payable upon maturity in December 2028 | 8,075,000 | 5,500,000 | ||||||
| Notes payable to a financial institution, secured by related equipment of the noncontrolling interest, payable in monthly installments of $165,205 including interest at rates ranging from 3.09% to 7.38%, with maturities at various dates through November 2030 | 5,308,207 | 6,937,571 | ||||||
| Notes payable to a financial institution, secured by related equipment of the noncontrolling interest, payable in monthly installments of $277,409 including interest at rates ranging from 2.66% to 7.27%, with maturities at various dates through June 2031 | 11,264,394 | 2,835,264 | ||||||
| Notes payable to a financial institution, secured by related equipment of the noncontrolling interest, payable in monthly installments of $50,807 including interest at rates ranging from 2.34% to 3.18%, with maturities at various dates through December 2025 | - | 421,322 | ||||||
| Notes payable to a financial institution, secured by related equipment of the noncontrolling interest, payable in monthly installments of $117,150, including interest at rates ranging from 5.47% to 6.01%, with maturities at various dates through November 2031 | 6,956,394 | 145,902 | ||||||
| Notes payable to a financial institution, secured by related equipment of the noncontrolling interest, payable in monthly installments of $171,248, including interest at rates ranging from 5.05% to 7.80%, with maturities at various dates through October 2031 | 9,491,330 | 895,299 | ||||||
| Notes payable to a financial institution, secured by related equipment of the noncontrolling interest, payable in monthly installments of $14,248, including interest at rates ranging from 7.2% to 10.34%, with maturities at various dates through April 2030 | 570,491 | 435,251 | ||||||
| Notes payable to a financial institution, secured by related vehicles, payable in monthly installments of $7,474, including interest at rates ranging from 1.9% to 10.99%, with maturities at various dates through December 2029 | 552,611 | 598,708 | ||||||
| 63,449,242 | 33,295,478 | |||||||
| Less current portion | (13,121,577 | ) | (7,086,981 | ) | ||||
| Noncurrent portion | $ | 50,327,665 | $ | 26,208,497 | ||||
16
HANSEN & ADKINS, INC. AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31, 2025 AND 2024
NOTE 7 – Notes Payable (Continued)
Future maturities of the notes payable as of December 31, 2025 are as follows:
| Year Ending December 31, | ||||
| 2026 | $ | 11,121,577 | ||
| 2027 | 11,432,068 | |||
| 2028 | 19,606,917 | |||
| 2029 | 10,565,468 | |||
| 2030 | 7,721,333 | |||
| Thereafter | 3,001,879 | |||
| $ | 63,449,242 | |||
NOTE 8 – Related-Party Transactions
Leasing Activities
The Company leases offices from Farquhar, a related party by common ownership. The lease requires monthly rental payments totaling $103,210 and is on a written month-to-month arrangement. Total related-party rental expense under this agreement was $1,238,519 and $1,326,365 for the years ended December 31, 2025 and 2024, respectively.
Due from Stockholders
At December 31, 2025 and 2024, the Company had advances outstanding from stockholders totaling $633,830 and $622,035, respectively. The amounts are noninterest bearing and repayment terms have not been established.
Notes Receivable from Related Parties
At December 31, 2025 and 2024, the Company has notes receivable from related parties, as discussed in Note 3.
17
HANSEN & ADKINS, INC. AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31, 2025 AND 2024
NOTE 9 – Commitments and Contingencies
Operating Leases
In addition to its related-party leases, the Company also leases equipment and facilities under operating leases that the Company considers either to be short-term in nature or below its established capitalization threshold. Rent expense for the years ended December 31, 2025 and 2024 totaled $4,478,704 and $3,431,032, respectively.
Legal Proceedings
The Company may be subject to various legal proceedings and claims arising in the ordinary course of its business. While the ultimate outcome of these matters is difficult to predict, management recognizes any anticipated losses in excess of insurance limits as expense when they become both probable and reasonably estimable. Management believes that the ultimate resolution of these matters will not have a material adverse effect on the Company’s consolidated financial position or results of operations.
During the year ended December 31, 2024, the Company settled two pending lawsuits. As a result, the Company accrued $8.6 million within accounts payable on the consolidated balance sheets and recorded the corresponding expense within other income (expense) on the consolidated statements of operations. At December 31, 2025, $500,000 of the settlement is accrued within accounts payable on the consolidated balance sheets.
NOTE 10 – Employee Benefit Plan
The Company offers a defined contribution employee benefit plan (the Plan) that includes a savings plan under Section 401(k) of the Internal Revenue Code. The Plan covers substantially all employees who have completed three months of consecutive service and are at least 21 years of age. Employees may contribute up to the maximum amount allowed by law, subject to certain Internal Revenue Service limitations. The Company makes a 25% matching contribution on employee contributions to the Plan. The Company may also make annual discretionary profit-sharing contributions. Employees are immediately vested in their contributions and are vested over a period of five years for employer contributions. During the years ended December 31, 2025 and 2024, the Company contributed $971,849 and $862,784, respectively, to the Plan.
18
HANSEN & ADKINS, INC. AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31, 2025 AND 2024
NOTE 11 – Supplemental Disclosures of Cash Flow Information
Cash paid for interest was $3,728,335 and $1,902,632 for the years ended December 31, 2025 and 2024, respectively.
Supplemental Schedule of Noncash Investing and Financing Activities
During the years ended December 31, 2025 and 2024, the Company sold equipment and vehicles for notes receivable totaling $41,343 and $277,000, respectively.
During the years ended December 31, 2025 and 2024, the Company financed $37,073,711 and $17,292,123 of equipment and vehicle purchases, respectively.
19
ON SUPPLEMENTARY FINANCIAL INFORMATION
To the Stockholders of
Hansen & Adkins, Inc. and subsidiaries:
We have audited the consolidated financial statements of Hansen & Adkins, Inc. and its subsidiaries as of and for the years ended December 31, 2025 and 2024, and our report thereon dated April 13, 2026, which expressed an unmodified opinion on those consolidated financial statements, appears on pages 1-2. Our audits were conducted for the purpose of forming an opinion on the consolidated financial statements as a whole. The consolidating financial statements on pages 23-27 are presented for purposes of additional analysis and are not a required part of the consolidated financial statements. Such information is the responsibility of management and was derived from and relates directly to the underlying accounting and other records used to prepare the consolidated financial statements. The information has been subjected to the auditing procedures applied in the audits of the consolidated financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the consolidated financial statements or to the consolidated financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the information is fairly stated in all material respects in relation to the consolidated financial statements as a whole.
/s/ Windes, Inc.
Long Beach, California
April 13, 2026
20
HANSEN & ADKINS, INC. AND SUBSIDIARIES
CONSOLIDATING BALANCE SHEET DECEMBER 31, 2025
| ASSETS | ||||||||||||||||||||
| H&A Auto | H&A Auto | |||||||||||||||||||
| Transport | Logistics | Royal | Eliminations | Consolidated | ||||||||||||||||
| CURRENT ASSETS | ||||||||||||||||||||
| Cash and cash equivalents | $ | 13,904,644 | $ | 1,903,955 | $ | 1,743,251 | $ | - | $ | 17,551,850 | ||||||||||
| Accounts receivable, net | 21,865,693 | 3,376,297 | - | - | 25,241,990 | |||||||||||||||
| Prepaid expenses and other current assets | 3,945,096 | 2,342,496 | - | - | 6,287,592 | |||||||||||||||
| Intercompany receivables | 491,739 | 11,249,978 | 20,556,168 | (32,297,885 | ) | - | ||||||||||||||
| Due from stockholders | 633,830 | - | - | - | 633,830 | |||||||||||||||
| Notes receivable, current portion | 375,962 | - | 532,365 | - | 908,327 | |||||||||||||||
| 41,216,964 | 18,872,726 | 22,831,784 | (32,297,885 | ) | 50,623,589 | |||||||||||||||
| PROPERTY AND EQUIPMENT, net | 1,373,869 | - | 50,731,727 | - | 52,105,596 | |||||||||||||||
| OTHER ASSETS | ||||||||||||||||||||
| Note receivable, noncurrent portion | 4,505,564 | - | 315,284 | - | 4,820,848 | |||||||||||||||
| Deposits | 313,644 | - | 260,686 | - | 574,330 | |||||||||||||||
| 4,819,208 | - | 575,970 | - | 5,395,178 | ||||||||||||||||
| TOTAL ASSETS | $ | 47,410,041 | $ | 18,872,726 | $ | 74,139,481 | $ | (32,297,885 | ) | $ | 108,124,363 | |||||||||
| LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT) | ||||||||||||||||||||
| CURRENT LIABILITIES | ||||||||||||||||||||
| Accounts payable | $ | 5,534,501 | $ | 1,797,297 | $ | - | $ | - | $ | 7,331,798 | ||||||||||
| Accrued expenses, current portion | 15,977,155 | 276,832 | - | - | 16,253,987 | |||||||||||||||
| Intercompany payables | 31,806,146 | 482,203 | 9,536 | (32,297,885 | ) | - | ||||||||||||||
| Notes payable, current portion | 2,146,033 | - | 10,975,544 | - | 13,121,577 | |||||||||||||||
| 55,463,835 | 2,556,332 | 10,985,080 | (32,297,885 | ) | 36,707,362 | |||||||||||||||
| NONCURRENT LIABILITIES | ||||||||||||||||||||
| Accrued expenses, noncurrent portion | 8,915,072 | - | - | - | 8,915,072 | |||||||||||||||
| Notes payable, noncurrent portion | 6,481,578 | - | 43,846,087 | - | 50,327,665 | |||||||||||||||
| 15,396,650 | - | 43,846,087 | - | 59,242,737 | ||||||||||||||||
| STOCKHOLDERS’ EQUITY | ||||||||||||||||||||
| Common stock | 120,000 | - | - | - | 120,000 | |||||||||||||||
| Additional paid-in capital | 20,915,648 | - | - | - | 20,915,648 | |||||||||||||||
| Retained earnings (accumulated deficit) | (44,486,092 | ) | 16,316,394 | - | - | (28,169,698 | ) | |||||||||||||
| Stockholders’ (deficit) equity attributable to Hansen & Adkins, Inc. | (23,450,444 | ) | 16,316,394 | - | - | (7,134,050 | ) | |||||||||||||
| Noncontrolling interest | - | - | 19,308,314 | - | 19,308,314 | |||||||||||||||
| (23,450,444 | ) | 16,316,394 | 19,308,314 | - | 12,174,264 | |||||||||||||||
| TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY | $ | 47,410,041 | $ | 18,872,726 | $ | 74,139,481 | $ | (32,297,885 | ) | $ | 108,124,363 | |||||||||
See Independent Auditors’ Report on Supplementary Financial Information on Page 20
21
HANSEN & ADKINS, INC. AND SUBSIDIARIES
CONSOLIDATING BALANCE SHEET DECEMBER 31, 2024
| ASSETS | ||||||||||||||||||||
| H&A Auto | H&A Auto | |||||||||||||||||||
| Transport | Logistics | Royal | Eliminations | Consolidated | ||||||||||||||||
| CURRENT ASSETS | ||||||||||||||||||||
| Cash and cash equivalents | $ | 14,375,405 | $ | 1,352,982 | $ | 2,922,411 | $ | - | $ | 18,650,798 | ||||||||||
| Accounts receivable, net | 22,180,648 | 4,315,851 | - | - | 26,496,499 | |||||||||||||||
| Prepaid expenses and other current assets | 3,945,780 | 11,486 | - | - | 3,957,266 | |||||||||||||||
| Intercompany receivables | 845,120 | 10,118,075 | 18,322,139 | (29,285,334 | ) | - | ||||||||||||||
| Due from stockholders | 622,035 | - | - | - | 622,035 | |||||||||||||||
| Notes receivable, current portion | 650,225 | - | 836,769 | - | 1,486,994 | |||||||||||||||
| 42,619,213 | 15,798,394 | 22,081,319 | (29,285,334 | ) | 51,213,592 | |||||||||||||||
| PROPERTY AND EQUIPMENT, net | 1,333,192 | - | 23,508,114 | - | 24,841,306 | |||||||||||||||
| OTHER ASSETS | ||||||||||||||||||||
| Note receivable, noncurrent portion | 4,742,447 | - | 884,693 | - | 5,627,140 | |||||||||||||||
| Deposits | 271,325 | - | 255,854 | - | 527,179 | |||||||||||||||
| 5,013,772 | - | 1,140,547 | - | 6,154,319 | ||||||||||||||||
| TOTAL ASSETS | $ | 48,966,177 | $ | 15,798,394 | $ | 46,729,980 | $ | (29,285,334 | ) | $ | 82,209,217 | |||||||||
| LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT) | ||||||||||||||||||||
| CURRENT LIABILITIES | ||||||||||||||||||||
| Accounts payable | $ | 14,594,717 | $ | 1,928,547 | $ | 50,000 | $ | - | $ | 16,573,264 | ||||||||||
| Accrued expenses, current portion | 17,098,151 | 358,226 | 21,765 | - | 17,478,142 | |||||||||||||||
| Intercompany payables | 28,440,214 | 760,398 | 84,722 | (29,285,334 | ) | - | ||||||||||||||
| Notes payable, current portion | 124,492 | - | 6,962,489 | - | 7,086,981 | |||||||||||||||
| 60,257,574 | 3,047,171 | 7,118,976 | (29,285,334 | ) | 41,138,387 | |||||||||||||||
| NONCURRENT LIABILITIES | ||||||||||||||||||||
| Accrued expenses, noncurrent portion | 9,390,747 | - | - | - | 9,390,747 | |||||||||||||||
| Notes payable, noncurrent portion | 5,974,216 | - | 20,234,281 | - | 26,208,497 | |||||||||||||||
| 15,364,963 | - | 20,234,281 | - | 35,599,244 | ||||||||||||||||
| STOCKHOLDERS’ EQUITY | ||||||||||||||||||||
| Common stock | 120,000 | - | - | - | 120,000 | |||||||||||||||
| Additional paid-in capital | 20,915,648 | - | - | - | 20,915,648 | |||||||||||||||
| Retained earnings (accumulated deficit) | (47,692,008 | ) | 12,751,223 | - | - | (34,940,785 | ) | |||||||||||||
| Stockholders’ (deficit) equity attributable to Hansen & Adkins, Inc. | (26,656,360 | ) | 12,751,223 | - | - | (13,905,137 | ) | |||||||||||||
| Noncontrolling interest | - | - | 19,376,723 | - | 19,376,723 | |||||||||||||||
| (26,656,360 | ) | 12,751,223 | 19,376,723 | - | 5,471,586 | |||||||||||||||
| TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY | $ | 48,966,177 | $ | 15,798,394 | $ | 46,729,980 | $ | (29,285,334 | ) | $ | 82,209,217 | |||||||||
See Independent Auditors’ Report on Supplementary Financial Information on Page 20
22
HANSEN & ADKINS, INC. AND SUBSIDIARIES
CONSOLIDATING STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 2025
| H&A Auto | H&A Auto | |||||||||||||||||||
| Transport | Logistics | Royal | Eliminations | Consolidated | ||||||||||||||||
| SALES | $ | 315,826,959 | $ | 73,468,759 | $ | 11,716,900 | $ | (55,808,941 | ) | $ | 345,203,677 | |||||||||
| COST OF SALES | 278,593,192 | 65,882,274 | 9,950,310 | (55,808,941 | ) | 298,616,835 | ||||||||||||||
| GROSS PROFIT | 37,233,767 | 7,586,485 | 1,766,590 | - | 46,586,842 | |||||||||||||||
| OPERATING EXPENSES | ||||||||||||||||||||
| General and administrative expenses | 36,522,811 | 2,909,489 | 9,117 | - | 39,441,417 | |||||||||||||||
| Gain on sale of property and equipment | (32,138 | ) | - | (2,121,189 | ) | - | (2,153,327 | ) | ||||||||||||
| 36,490,673 | 2,909,489 | (2,112,072 | ) | - | 37,288,090 | |||||||||||||||
| INCOME FROM OPERATIONS | 743,094 | 4,676,996 | 3,878,662 | - | 9,298,752 | |||||||||||||||
| OTHER INCOME (EXPENSE) | ||||||||||||||||||||
| Other income (expense) | 3,121,158 | (1,126,956 | ) | (502,372 | ) | - | 1,491,830 | |||||||||||||
| Interest expense | (991,428 | ) | - | (2,736,907 | ) | - | (3,728,335 | ) | ||||||||||||
| Interest income | 437,845 | 15,131 | 88,917 | - | 541,893 | |||||||||||||||
| 2,567,575 | (1,111,825 | ) | (3,150,362 | ) | - | (1,694,612 | ) | |||||||||||||
| INCOME BEFORE PROVISION FOR (BENEFIT FROM) STATE TAXES | 3,310,669 | 3,565,171 | 728,300 | - | 7,604,140 | |||||||||||||||
| PROVISION FOR (BENEFIT FROM) STATE TAXES | 26,563 | - | (281,047 | ) | - | (254,484 | ) | |||||||||||||
| NET INCOME | $ | 3,284,106 | $ | 3,565,171 | $ | 1,009,347 | $ | - | $ | 7,858,624 | ||||||||||
See Independent Auditors’ Report on Supplementary Financial Information on Page 20
23
HANSEN & ADKINS, INC. AND SUBSIDIARIES
CONSOLIDATING STATEMENT
OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 2024
| H&A Auto | H&A Auto | |||||||||||||||||||
| Transport | Logistics | Royal | Eliminations | Consolidated | ||||||||||||||||
| SALES | $ | 292,208,604 | $ | 60,091,480 | $ | 9,260,307 | $ | (44,449,077 | ) | $ | 317,111,314 | |||||||||
| COST OF SALES | 257,749,034 | 53,224,853 | 8,465,208 | (44,449,077 | ) | 274,990,018 | ||||||||||||||
| GROSS PROFIT | 34,459,570 | 6,866,627 | 795,099 | - | 42,121,296 | |||||||||||||||
| OPERATING EXPENSES | ||||||||||||||||||||
| General and administrative expenses | 32,202,842 | 2,402,292 | 271,881 | - | 34,877,015 | |||||||||||||||
| Loss (gain) on sale of equipment | 57,978 | - | (1,199,395 | ) | - | (1,141,417 | ) | |||||||||||||
| 32,260,820 | 2,402,292 | (927,514 | ) | - | 33,735,598 | |||||||||||||||
| INCOME FROM OPERATIONS | 2,198,750 | 4,464,335 | 1,722,613 | - | 8,385,698 | |||||||||||||||
| OTHER INCOME (EXPENSE) | ||||||||||||||||||||
| Other income (expense) | (10,133,570 | ) | (805,376 | ) | 134,149 | - | (10,804,797 | ) | ||||||||||||
| Interest expense | (331,353 | ) | - | (1,571,279 | ) | - | (1,902,632 | ) | ||||||||||||
| Interest income | 481,720 | 32,738 | 196,251 | - | 710,709 | |||||||||||||||
| (9,983,203 | ) | (772,638 | ) | (1,240,879 | ) | - | (11,996,720 | ) | ||||||||||||
| INCOME (LOSS) BEFORE PROVISION FOR (BENEFIT FROM) STATE TAXES | (7,784,453 | ) | 3,691,697 | 481,734 | - | (3,611,022 | ) | |||||||||||||
| PROVISION FOR (BENEFIT FROM) STATE TAXES | 310,733 | - | (11,844 | ) | - | 298,889 | ||||||||||||||
| NET INCOME (LOSS) | $ | (8,095,186 | ) | $ | 3,691,697 | $ | 493,578 | $ | - | $ | (3,909,911 | ) | ||||||||
See Independent Auditors’ Report on Supplementary Financial Information on Page 20
24
HANSEN & ADKINS, INC. AND SUBSIDIARIES
CONSOLIDATING STATEMENTS OF CHANGES
IN STOCKHOLDERS’ EQUITY
FOR THE YEARS ENDED DECEMBER 31, 2025 AND 2024
| Stockholders’ | ||||||||||||||||||||||||||||||||||||||||||||||||
| Retained Earnings | Equity (Deficit) | |||||||||||||||||||||||||||||||||||||||||||||||
| Common Stock | Additional Paid-In Capital | (Accumulated Deficit) | Attributed to | |||||||||||||||||||||||||||||||||||||||||||||
| H&A Auto | H&A Auto | H&A Auto | H&A Auto | H&A Auto | H&A Auto | Hansen & | ||||||||||||||||||||||||||||||||||||||||||
| Transport | Logistics | Consolidated | Transport | Logistics | Consolidated | Transport | Logistics | Consolidated | Adkins, Inc. | Royal | Total | |||||||||||||||||||||||||||||||||||||
| BALANCE AT JANUARY 1, 2024 | $ | 120,000 | $ | - | $ | 120,000 | $ | 20,915,648 | $ | - | $ | 20,915,648 | $ | (32,862,710 | ) | $ | 9,059,526 | $ | (23,803,184 | ) | $ | (2,767,536 | ) | $ | 21,390,243 | $ | 18,622,707 | |||||||||||||||||||||
| DISTRIBUTIONS TO STOCKHOLDERS | - | - | - | - | - | - | (6,734,112 | ) | - | (6,734,112 | ) | (6,734,112 | ) | (2,507,098 | ) | (9,241,210 | ) | |||||||||||||||||||||||||||||||
| NET INCOME (LOSS) | - | - | - | - | - | - | (8,095,186 | ) | 3,691,697 | (4,403,489 | ) | (4,403,489 | ) | 493,578 | (3,909,911 | ) | ||||||||||||||||||||||||||||||||
| BALANCE AT DECEMBER 31, 2024 | 120,000 | - | 120,000 | 20,915,648 | - | 20,915,648 | (47,692,008 | ) | 12,751,223 | (34,940,785 | ) | (13,905,137 | ) | 19,376,723 | 5,471,586 | |||||||||||||||||||||||||||||||||
| DISTRIBUTIONS TO STOCKHOLDERS | - | - | - | - | - | - | (78,190 | ) | - | (78,190 | ) | (78,190 | ) | (1,077,756 | ) | (1,155,946 | ) | |||||||||||||||||||||||||||||||
| NET INCOME | - | - | - | - | - | - | 3,284,106 | 3,565,171 | 6,849,277 | 6,849,277 | 1,009,347 | 7,858,624 | ||||||||||||||||||||||||||||||||||||
| BALANCE AT DECEMBER 31, 2025 | $ | 120,000 | $ | - | $ | 120,000 | $ | 20,915,648 | $ | - | $ | 20,915,648 | $ | (44,486,092 | ) | $ | 16,316,394 | $ | (28,169,698 | ) | $ | (7,134,050 | ) | $ | 19,308,314 | $ | 12,174,264 | |||||||||||||||||||||
See Independent Auditors’ Report on Supplementary Financial Information on Page 20
25
Exhibit 99.4
HANSEN & ADKINS, INC. AND SUBSIDIARIES
CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
JUNE 30, 2026
TABLE OF CONTENTS
i
INDEPENDENT ACCOUNTANTS’ REVIEW REPORT
To the Stockholders of
Hansen & Adkins, Inc. and subsidiaries:
We have reviewed the accompanying consolidated financial statements of Hansen & Adkins, Inc. and subsidiaries (collectively, the Company), which comprise the consolidated balance sheets as of June 30, 2026 and December 31, 2025, and the related consolidated statements of income, changes in stockholders’ equity, and cash flows for the six-month periods ended June 30, 2026 and 2025, and the related notes to the consolidated financial statements. A review includes primarily applying analytical procedures to management’s financial data and making inquiries of company management. A review is substantially less in scope than an audit, the objective of which is the expression of an opinion regarding the consolidated financial statements as a whole. Accordingly, we do not express such an opinion.
Management’s Responsibility for the Consolidated Financial Statements
Management is responsible for the preparation and fair presentation of these consolidated financial statements in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of consolidated financial statements that are free from material misstatement whether due to fraud or error.
Accountants’ Responsibility
Our responsibility is to conduct the review engagement in accordance with Statements on Standards for Accounting and Review Services promulgated by the Accounting and Review Services Committee of the AICPA. Those standards require us to perform procedures to obtain limited assurance as a basis for reporting whether we are aware of any material modifications that should be made to the consolidated financial statements for them to be in accordance with accounting principles generally accepted in the United States of America. We believe that the results of our procedures provide a reasonable basis for our conclusion.
We are required to be independent of the Company and to meet our other ethical responsibilities, in accordance with the relevant ethical requirements related to our review.
Accountants’ Conclusion
Based on our review, we are not aware of any material modifications that should be made to the accompanying financial statements in order for them to be in accordance with accounting principles generally accepted in the United States of America.
/s/ Windes, Inc.
Long Beach, California
October 23, 2026
1
HANSEN & ADKINS, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(Unaudited)
| June 30, | December 31, | |||||||
| 2026 | 2025 | |||||||
| ASSETS | ||||||||
| CURRENT ASSETS | ||||||||
| Cash and cash equivalents (variable interest entity restricted: $862,563 - 2026; $1,743,251 - 2025) | $ | 15,246,663 | $ | 17,551,850 | ||||
| Accounts receivable, net of allowance for credit losses of $705,077 - 2026; $654,890 - 2025 | 28,811,492 | 25,241,990 | ||||||
| Prepaid expenses and other current assets | 6,530,826 | 6,287,592 | ||||||
| Due from stockholders | 634,240 | 633,830 | ||||||
| Notes receivable, current portion (variable interest entity restricted: $444,553 - 2026; $532,365 - 2025) | 899,076 | 908,327 | ||||||
| 52,122,297 | 50,623,589 | |||||||
| PROPERTY AND EQUIPMENT, net (variable interest entity restricted: $55,005,224 - 2026; $50,731,727 - 2025) | 56,337,113 | 52,105,596 | ||||||
| OTHER ASSETS | ||||||||
| Notes receivable, noncurrent portion (variable interest entity restricted: $196,849 - 2026; $315,284 - 2025) | 4,799,221 | 4,820,848 | ||||||
| Deposits | 1,542,453 | 574,330 | ||||||
| 6,341,674 | 5,395,178 | |||||||
| TOTAL ASSETS | $ | 114,801,084 | $ | 108,124,363 | ||||
| LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||
| CURRENT LIABILITIES | ||||||||
| Accounts payable | $ | 7,851,067 | $ | 7,331,798 | ||||
| Accrued expenses, current portion | 18,451,552 | 16,253,987 | ||||||
| Notes payable, current portion (variable interest entity nonrecourse: $12,409,943 - 2026; $10,975,544 - 2025) | 14,561,749 | 13,121,577 | ||||||
| 40,864,368 | 36,707,362 | |||||||
| NONCURRENT LIABILITIES | ||||||||
| Accrued expenses, noncurrent portion | 8,777,637 | 8,915,072 | ||||||
| Notes payable, noncurrent portion (variable interest entity nonrecourse: $46,479,093 - 2026; $43,846,087 - 2025) | 51,804,487 | 50,327,665 | ||||||
| 60,582,124 | 59,242,737 | |||||||
| COMMITMENTS AND CONTINGENCIES (Notes 1, 8, and 9) | ||||||||
| STOCKHOLDERS’ EQUITY | ||||||||
| Common stock, no par value; 1,000 shares authorized, issued, and outstanding | 120,000 | 120,000 | ||||||
| Additional paid-in capital | 20,915,648 | 20,915,648 | ||||||
| Accumulated deficit | (26,571,042 | ) | (28,169,698 | ) | ||||
| Stockholders’ deficit attributable to Hansen & Adkins, Inc. | (5,535,394 | ) | (7,134,050 | ) | ||||
| Noncontrolling interest | 18,889,986 | 19,308,314 | ||||||
| Total Stockholders’ Equity | 13,354,592 | 12,174,264 | ||||||
| TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY | $ | 114,801,084 | $ | 108,124,363 | ||||
See Independent Accountants’ Review Report
The accompanying notes are an integral part of these consolidated financial statements.
2
HANSEN & ADKINS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
| For the Six-Month Period Ended | ||||||||
| June 30, | ||||||||
| 2026 | 2025 | |||||||
| REVENUE | ||||||||
| Vehicle transportation and related services | $ | 148,583,132 | $ | 161,434,760 | ||||
| Fuel surcharges | 11,800,712 | 8,280,503 | ||||||
| 160,383,844 | 169,715,263 | |||||||
| COST OF REVENUE | 140,627,114 | 144,872,756 | ||||||
| GROSS PROFIT | 19,756,730 | 24,842,507 | ||||||
| OPERATING EXPENSES | ||||||||
| General and administrative expenses | 18,710,304 | 20,244,064 | ||||||
| Gain on sale of property and equipment | (1,675,405 | ) | (542,076 | ) | ||||
| 17,034,899 | 19,701,988 | |||||||
| INCOME FROM OPERATIONS | 2,721,831 | 5,140,519 | ||||||
| OTHER INCOME (EXPENSE) | ||||||||
| Other income | 1,607,209 | 826,238 | ||||||
| Interest expense | (2,173,830 | ) | (1,644,932 | ) | ||||
| Interest income | 215,008 | 255,644 | ||||||
| (351,613 | ) | (563,050 | ) | |||||
| INCOME BEFORE PROVISION FOR | ||||||||
| STATE FRANCHISE TAXES | 2,370,218 | 4,577,469 | ||||||
| PROVISION FOR STATE FRANCHISE TAXES | 291,179 | 321,797 | ||||||
| NET INCOME | 2,079,039 | 4,255,672 | ||||||
| LESS: INCOME ATTRIBUTABLE TO | ||||||||
| NONCONTROLLING INTEREST | 361,176 | 683,861 | ||||||
| NET INCOME ATTRIBUTABLE TO | ||||||||
| HANSEN & ADKINS, INC. | $ | 1,717,863 | $ | 3,571,811 | ||||
See Independent Accountants’ Review Report
The accompanying notes are an integral part of these consolidated financial statements.
3
HANSEN & ADKINS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY FOR THE SIX-MONTH PERIODS ENDED JUNE 30, 2026 AND 2025
(Unaudited)
| Stockholders’ | ||||||||||||||||||||||||
| Deficit | ||||||||||||||||||||||||
| Additional | Attributable to | Total | ||||||||||||||||||||||
| Common | Paid-In | Accumulated | Hansen & | Noncontrolling | Stockholders’ | |||||||||||||||||||
| Stock | Capital | Deficit | Adkins, Inc. | Interest | Equity | |||||||||||||||||||
| BALANCE AT JANUARY 1, 2026 | $ | 120,000 | $ | 20,915,648 | $ | (28,169,698 | ) | $ | (7,134,050 | ) | $ | 19,308,314 | $ | 12,174,264 | ||||||||||
| DISTRIBUTIONS TO STOCKHOLDERS AND MEMBERS | - | - | (119,207 | ) | (119,207 | ) | (779,504 | ) | (898,711 | ) | ||||||||||||||
| NET INCOME | - | - | 1,717,863 | 1,717,863 | 361,176 | 2,079,039 | ||||||||||||||||||
| BALANCE AT JUNE 30, 2026 | $ | 120,000 | $ | 20,915,648 | $ | (26,571,042 | ) | $ | (5,535,394 | ) | $ | 18,889,986 | $ | 13,354,592 | ||||||||||
| BALANCE AT JANUARY 1, 2025 | $ | 120,000 | $ | 20,915,648 | $ | (34,940,785 | ) | $ | (13,905,137 | ) | $ | 19,376,723 | $ | 5,471,586 | ||||||||||
| DISTRIBUTIONS TO STOCKHOLDERS AND MEMBERS | - | - | (42,004 | ) | (42,004 | ) | (177,810 | ) | (219,814 | ) | ||||||||||||||
| NET INCOME | - | - | 3,571,811 | 3,571,811 | 683,861 | 4,255,672 | ||||||||||||||||||
| BALANCE AT JUNE 30, 2025 | $ | 120,000 | $ | 20,915,648 | $ | (31,410,978 | ) | $ | (10,375,330 | ) | $ | 19,882,774 | $ | 9,507,444 | ||||||||||
See Independent Accountants’ Review Report
The accompanying notes are an integral part of these consolidated financial statements.
4
HANSEN & ADKINS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
| For the Six-Month Period Ended | ||||||||
| June 30, | ||||||||
| 2026 | 2025 | |||||||
| CASH FLOWS FROM OPERATING ACTIVITIES | ||||||||
| Net income | $ | 2,079,039 | $ | 4,255,672 | ||||
| Adjustments to reconcile net income to net cash from operating activities: | ||||||||
| Depreciation and amortization | 5,884,237 | 4,409,985 | ||||||
| Gain on sale of property and equipment | (1,675,405 | ) | (542,076 | ) | ||||
| Changes in operating assets and liabilities: | ||||||||
| Accounts receivable | (3,569,502 | ) | (6,518,714 | ) | ||||
| Prepaid expenses and other current assets | (243,234 | ) | (3,349,504 | ) | ||||
| Deposits | (968,123 | ) | 17,618 | |||||
| Accounts payable and accrued expenses | 2,579,399 | (1,484,881 | ) | |||||
| Net Cash Provided By (Used In) Operating Activities | 4,086,411 | (3,211,900 | ) | |||||
| CASH FLOWS FROM INVESTING ACTIVITIES | ||||||||
| Repayments on notes receivable | 30,878 | 542,116 | ||||||
| Advances to stockholders | (410 | ) | (10,762 | ) | ||||
| Purchases of property and equipment | (278,658 | ) | (310,633 | ) | ||||
| Proceeds from sale of property and equipment | 1,702,361 | 646,764 | ||||||
| Net Cash Provided By Investing Activities | 1,454,171 | 867,485 | ||||||
| CASH FLOWS FROM FINANCING ACTIVITIES | ||||||||
| Repayments on notes payable | (6,947,058 | ) | (4,339,701 | ) | ||||
| Borrowings of notes payable | - | 3,575,000 | ||||||
| Members’ distributions | (779,504 | ) | (177,810 | ) | ||||
| Stockholders’ distributions | (119,207 | ) | (42,004 | ) | ||||
| Net Cash Used In Financing Activities | (7,845,769 | ) | (984,515 | ) | ||||
| NET CHANGE IN CASH AND CASH EQUIVALENTS | (2,305,187 | ) | (3,328,930 | ) | ||||
| CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD | 17,551,850 | 18,650,798 | ||||||
| CASH AND CASH EQUIVALENTS, END OF PERIOD | $ | 15,246,663 | $ | 15,321,868 | ||||
See Independent Accountants’ Review Report
The accompanying notes are an integral part of these consolidated financial statements.
5
HANSEN & ADKINS, INC. AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2026
NOTE 1 – Summary of Significant Accounting Policies
Nature of Business
Hansen & Adkins, Inc. (Hansen & Adkins) was formed in April 1994 to provide vehicle transportation and related services throughout the United States.
Basis of Accounting
The accompanying consolidated financial statements have been prepared on the accrual basis of accounting in accordance with accounting principles generally accepted in the United States of America (U.S. GAAP).
Consolidation of Subsidiaries
These consolidated financial statements include the accounts of Hansen & Adkins, its wholly owned subsidiaries, Hansen & Adkins Auto Transport, Inc. (H&A Auto Transport) and Hansen & Adkins Auto Logistics, Inc. (H&A Auto Logistics), and Royal Truck Leasing, LLC (Royal), a variable interest entity (collectively, the Company). All significant intercompany balances and transactions have been eliminated in consolidation.
Use of Estimates and Assumptions
The preparation of the consolidated financial statements in accordance with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities, and the reported amounts of revenue and expenses. Significant items subject to such estimates and assumptions include valuation of accounts receivable, the useful lives of property and equipment, accrued expenses, including damage claims, and accrued workers’ compensation. Actual results could differ from those estimates.
Cash and Cash Equivalents
For the purposes of the consolidated balance sheets and consolidated statements of cash flows, the Company considers cash on hand and all highly liquid debt instruments purchased with original maturities of three months or less to be cash and cash equivalents.
6
HANSEN & ADKINS, INC. AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2026
NOTE 1 – Summary of Significant Accounting Policies (Continued)
Accounts Receivable
Accounts receivable are stated at the amount management expects to collect from outstanding balances at year-end. The Company extends credit to its customers in the ordinary course of business and mitigates related credit risk by actively pursuing past due accounts. The Company measures expected credit losses on a collective basis when similar characteristics exist using historical experience, current economic conditions, credit ratings, and other relevant factors in its credit estimation process and provides for probable uncollectible amounts through a charge to earnings and a credit to an allowance for credit losses based on its assessment.
Balances that are still outstanding after management has made reasonable collection efforts are written off through a charge to the allowance for credit losses and a credit to accounts receivable. The Company maintained an allowance for credit losses of $705,077 as of June 30, 2026 and $654,890 as of December 31, 2025. The Company recognized credit loss expenses of $113,000 and $910,000 during the six-month periods ended June 30, 2026 and 2025, respectively.
Management has elected the practical expedient to assume that current conditions as of June 30, 2026 remain unchanged for the remaining life of accounts receivable. Management has also elected the accounting policy to consider subsequent collection activity through October 23, 2026 when estimating expected credit losses. Accounts receivable collected prior to that date are excluded from the allowance for credit losses.
Concentration of Business and Credit Risk
The Company maintains its cash and cash equivalents at major financial institutions in deposit accounts insured by the Federal Deposit Insurance Corporation. At times, amounts may exceed federally insured limits. The Company has not experienced any losses in such accounts and believes it is not exposed to any significant credit risk.
The Company’s business is concentrated in the transportation of automobiles and related services; accordingly, its performance may be affected by industry trends.
Four and three customers accounted for approximately 68.7% and 53.4% of total revenue for the six-month periods ended June 30, 2026 and 2025, respectively. Four and three customers represented approximately 72.9% and 50.0% of total accounts receivable at June 30, 2026 and December 31, 2025, respectively.
7
HANSEN & ADKINS, INC. AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2026
NOTE 1 – Summary of Significant Accounting Policies (Continued)
Property and Equipment
Property and equipment items are stated at cost. Depreciation is computed on a straight-line basis over the estimated useful lives of the related assets, which range from three to seven years. Leasehold improvements are amortized using the straight-line method over the shorter of their estimated useful lives or the lease term. Expenditures for maintenance and repairs are expensed as incurred, and expenditures that increase the value or productive capacity of assets are capitalized. When property and equipment are retired, sold, or otherwise disposed of, the asset’s carrying amount and related accumulated depreciation are removed from the accounts and any gain or loss is reflected in the consolidated statements of income.
Impairment of Long-Lived Assets
Long-lived assets, such as property and equipment, are reviewed for impairment whenever events or changes in circumstances indicate that their carrying amounts may not be recoverable. Recoverability of assets is measured by comparison of the carrying amount of the asset to the net undiscounted future cash flows expected to be generated from the asset. If the future undiscounted cash flows are not sufficient to recover the carrying value of the asset, the asset’s carrying value is adjusted to fair value. To date, no impairment has been recorded.
Fair Value of Financial Instruments
Financial instruments primarily consist of accounts receivable, accounts payable, accrued expenses, and notes payable. The fair values of accounts receivable, accounts payable, and accrued expenses approximate their carrying amounts due to their short-term maturities. The carrying amounts of substantially all of the Company’s outstanding notes payable approximate fair value because their interest rates are based on variable reference rates or rates approximating those currently available to the Company for debt with similar terms.
Accrued Workers’ Compensation
The Company carries insurance policies to cover various risks, primarily general liability and workers’ compensation, under which the Company is liable to reimburse the insurance carrier for a portion of each claim paid. The Company is self-insured for the first $250,000 of each workers’ compensation claim. The Company has accrued a liability for all known claims, as well as those that are incurred but not reported.
8
HANSEN & ADKINS, INC. AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2026
NOTE 1 – Summary of Significant Accounting Policies (Continued)
Revenue Recognition
The Company derives its revenue primarily from vehicle transportation and related services.
Revenue from contracts with customers is recognized over time as services are performed, as control is continuously transferred to the customer and the customer simultaneously receives and consumes the benefits of the services. Revenue is measured as the amount of total consideration the Company expects to receive in exchange for providing services.
A performance obligation is a promise in a contract to transfer a distinct good or service to the customer and is defined as the unit of account. For all contracts with customers, the Company contracts to provide distinct services for an established rate, such as transporting an automobile from a port of entry to a dealership. For contracts with multiple performance obligations, the transaction price is allocated to each performance obligation based on the relative standalone selling price of each distinct service. The relative standalone selling price of each distinct service is generally observable based on the terms of the contract. None of the Company’s contracts contain volume-based discounts.
The Company has a fuel surcharge revenue program in place with the majority of customers to recover the majority of fuel costs.
Contract assets relate to the Company’s right to payment for performance completed to date under a contract. Accounts receivable are recorded when the right to payment becomes unconditional.
Contract liabilities relate to payment received in advance of performance under a contract. The Company has no contract liabilities at June 30, 2026 and December 31, 2025.
A summary of accounts receivable is as follows:
| June 30, | June 30, | January 1, | January 1, | |||||||||||||
| 2026 | 2025 | 2026 | 2025 | |||||||||||||
| Accounts receivable, net | $ | 28,811,492 | $ | 33,015,213 | $ | 25,241,990 | $ | 26,496,499 | ||||||||
9
HANSEN & ADKINS, INC. AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2026
NOTE 1 – Summary of Significant Accounting Policies (Continued)
Revenue Recognition (Continued)
The following table presents disaggregated revenue recognized by geographic area:
| For the Six-Month Period Ended | ||||||||
| June 30, | ||||||||
| 2026 | 2025 | |||||||
| North | $ | 61,292,338 | $ | 59,888,407 | ||||
| South | 99,091,506 | 109,826,856 | ||||||
| $ | 160,383,844 | $ | 169,715,263 | |||||
Variable Interest Entities
Hansen & Adkins consolidates the assets, liabilities, and results of operations of variable interest entities (VIEs) for which it is the primary beneficiary. Hansen & Adkins has determined that Royal is a VIE for which it is the primary beneficiary and, accordingly, has consolidated Royal in its financial statements as of and for the six-month periods ended June 30, 2026 and 2025.
As a limited liability company (LLC), the members of Royal are not personally liable for the debts, obligations, or liabilities of Royal. The liabilities of Royal consolidated by Hansen & Adkins do not represent additional claims on Hansen & Adkins’ general assets; rather, they represent claims against specific assets of Royal. Likewise, the assets of Royal consolidated by Hansen & Adkins do not represent additional assets available to satisfy claims against Hansen & Adkins’ general liabilities.
Income Taxes
The Company’s stockholders have elected to be taxed as an S corporation for federal and state tax purposes and, as such, the income is taxed directly to the stockholders. There is a 1.5% California franchise tax charged at the corporate level. The Company operates in other state tax jurisdictions that may not recognize S corporation status, resulting in tax being assessed to the Company.
10
HANSEN & ADKINS, INC. AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2026
NOTE 1 – Summary of Significant Accounting Policies (Continued)
Income Taxes (Continued)
Income taxes are not provided for Royal because, as an LLC, its taxable earnings or losses are reported by, and are the responsibility of, its individual members.
The Company recognizes the effect of income tax positions taken or expected to be taken in a tax return only if those positions are more likely than not to be sustained. Recognized income tax positions are measured at the largest amount that is greater than 50% likely of being realized. Changes in recognition or measurement are reflected in the period in which the change in judgment occurs.
The Company’s income tax filings are subject to audit by various taxing authorities. The Company’s open audit periods are generally three and four years for federal and state tax filings, respectively.
Lease Arrangements
The Company determines if an arrangement contains a lease at inception based on whether the Company has the right to control the asset during the contract period and other facts and circumstances.
The Company’s policy for determining its lease discount rate used for measuring lease liabilities is to use the rate implicit in the lease whenever that rate is readily determinable. If the rate implicit in the lease is not readily determinable, then the Company has elected to use the risk-free discount rate, as permitted by U.S. GAAP, determined using a period comparable with that of the lease term.
The Company has elected a policy to account for short-term leases, defined as any lease with a term of 12 months or less, by recognizing all components of the lease payment in the consolidated statements of income in the period in which the obligation for payment is incurred.
The Company has evaluated all of its lease arrangements and determined that they meet the definition of short-term leases or are below its capitalization policy.
11
HANSEN & ADKINS, INC. AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2026
NOTE 1 – Summary of Significant Accounting Policies (Continued)
Common Control Leasing Arrangements
The Company leases office facilities from Farquhar Investments, LLC (Farquhar), an entity under common control with the Company (see Note 8). The Company has elected the private-company accounting alternative under ASC 810 not to apply the VIE guidance to legal entities under common control that meet the applicable scope criteria. The election is applied to all current and future legal entities under common control that qualify for the alternative. Accordingly, the Company has not applied the variable interest entity guidance to Farquhar. The Company’s involvement with Farquhar includes the month-to-month leasing arrangement and the related note receivable described in Note 3. The lease is accounted for under the Company’s short-term lease policy election.
Insurance Financing Arrangements
The Company entered into various arrangements to finance certain business insurance premiums, which require payments of up to $316,994 and expire at various dates through June 2027. As of June 30, 2026 and December 31, 2025, amounts outstanding under these arrangements totaled $4,716,464 and $2,239,733, respectively, and are included in accrued expenses on the consolidated balance sheets.
Subsequent Events
Management has evaluated subsequent events from the date of the consolidated balance sheets through October 23, 2026, the date the consolidated financial statements were available to be issued.
On August 10, 2026, the Company entered into a definitive equity purchase agreement to be acquired by Proficient Auto Logistics, Inc. (NASDAQ: PAL). The transaction formally closed on August 14, 2026. Under the terms of the agreement, the upfront purchase price was approximately $130 million, which consisted of approximately $52 million in cash, $3 million in Proficient common stock, and the assumption of approximately $75 million in debt.
12
HANSEN & ADKINS, INC. AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2026
NOTE 1 – Summary of Significant Accounting Policies (Continued)
Subsequent Events (Continued)
Additionally, the agreement includes a contingent earnout provision under which the Company’s former owners may receive up to approximately $22.1 million in additional consideration. The earnout is payable primarily in cash, with up to $2 million in Proficient common stock, contingent upon the achievement of specific near-term EBITDA targets. As a result of this transaction, the Company operates as a wholly owned subsidiary of Proficient Auto Logistics, Inc.
NOTE 2 – Prepaid Expenses and Other Current Assets
Prepaid expenses and other current assets consist of the following:
| June 30, | December 31, | |||||||
| 2026 | 2025 | |||||||
| Prepaid insurance | $ | 4,722,369 | $ | 2,505,319 | ||||
| Other receivables | 414,634 | 2,583,558 | ||||||
| Prepaid licenses and registrations | 1,076,629 | 758,663 | ||||||
| Other | 317,194 | 440,052 | ||||||
| $ | 6,530,826 | $ | 6,287,592 | |||||
13
HANSEN & ADKINS, INC. AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2026
NOTE 3 – Notes Receivable
Notes receivable consist of the following:
| June 30, | December 31, | |||||||
| 2026 | 2025 | |||||||
| Related Parties | ||||||||
| Noninterest-bearing notes receivable from Hansen & Adkins Canada, Ltd. (H&A Canada), a related entity that is owned by the owners of the Company, payable upon demand with repayment not expected in the near future | $ | 2,512,919 | $ | 2,512,919 | ||||
| Note receivable from Farquhar, a related entity that is owned by the owners of the Company, payable in monthly installments of $27,306, including interest at 6.00%, maturing in June 2035 | 2,543,976 | 2,368,607 | ||||||
| Notes receivable from a related entity that is owned by the owners of the Company, from the sale of equipment, payable in monthly installments, including interest at 7.7%, with maturities at various dates through September 2027 | 401,860 | 552,112 | ||||||
| Other | ||||||||
| Notes receivable from the sale of equipment, payable in monthly installments, including interest at rates ranging from 7.5% to 8.0%, with maturities at various dates through September 2027 | 239,542 | 295,537 | ||||||
| 5,698,297 | 5,729,175 | |||||||
| Less current portion | (899,076 | ) | (908,327 | ) | ||||
| Noncurrent portion | $ | 4,799,221 | $ | 4,820,848 | ||||
14
HANSEN & ADKINS, INC. AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2026
NOTE 4 – Property and Equipment
Property and equipment consist of the following:
| June 30, | December 31, | |||||||
| 2026 | 2025 | |||||||
| Tractors and trailers | $ | 125,754,394 | $ | 118,436,225 | ||||
| Computer equipment | 1,893,104 | 1,795,372 | ||||||
| Service cars and equipment | 1,154,852 | 1,391,848 | ||||||
| Office furniture | 254,694 | 254,694 | ||||||
| Buildings and leasehold improvements | 794,769 | 794,769 | ||||||
| 129,851,813 | 122,672,908 | |||||||
| Less accumulated depreciation and amortization | (73,720,398 | ) | (70,773,010 | ) | ||||
| 56,131,415 | 51,899,898 | |||||||
| Land | 205,698 | 205,698 | ||||||
| $ | 56,337,113 | $ | 52,105,596 | |||||
Depreciation and amortization expense for the six-month periods ended June 30, 2026 and 2025 totaled $5,884,237 and $4,409,985, respectively.
NOTE 5 – Accrued Expenses
Accrued expenses consist of the following:
| June 30, | December 31, | |||||||
| 2026 | 2025 | |||||||
| Damage and accident claims | $ | 12,657,623 | $ | 14,232,367 | ||||
| Workers’ compensation | 2,003,763 | 2,045,473 | ||||||
| Payroll and related liabilities | 5,613,948 | 4,247,712 | ||||||
| Insurance financing | 4,716,464 | 2,239,733 | ||||||
| Owner operators’ escrow | 1,374,493 | 1,527,438 | ||||||
| Health insurance | 696,265 | 717,869 | ||||||
| Other | 166,633 | 158,467 | ||||||
| $ | 27,229,189 | $ | 25,169,059 | |||||
NOTE 6 – Line of Credit
The Company entered into a line of credit agreement with a bank for borrowings of up to $20 million. Outstanding balances under this agreement bear interest at the Prime Rate. As of June 30, 2026 and December 31, 2025, there were no amounts outstanding under the line of credit; however, the Company had outstanding standby letters of credit of approximately $5,300,000. The agreement contains certain restrictive covenants and financial reporting requirements and was secured by substantially all of the Company’s assets. The Company was in compliance with these covenants as of June 30, 2026. This credit agreement matures in August 2028.
The agreement provides for two term loans, Term Loan A and Term Loan B, in addition to the line of credit, with maximum principal amounts of $6 million and $10 million, respectively. As of June 30, 2026, no amounts were outstanding under Term Loan A, while $7,075,000 was outstanding under Term Loan B. Interest rates on the term loans are determined based on criteria specified in the agreement.
15
HANSEN & ADKINS, INC. AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2026
NOTE 7 – Notes Payable
Notes payable consist of the following:
| June 30, | December 31, | |||||||
| 2026 | 2025 | |||||||
| Various notes payable to a financial institution, secured by related equipment of the noncontrolling interest, payable in monthly installments ranging from $2,741 to $61,539, including interest between 5.05% to 7.80%, with maturities at various dates through March 2032 | $ | 11,309,996 | $ | 9,491,330 | ||||
| Various notes payable to a financial institution, secured by related equipment of the noncontrolling interest, payable in monthly installments between $2,412 to $86,771, including interest at rates ranging from 2.66% to 7.27%, with maturities at various dates through June 2031 | 9,923,222 | 11,264,394 | ||||||
| Note payable (Term Loan B) to a financial institution, secured by substantially all assets of the Company, payable in monthly installments of $166,667 plus interest at 7.50%, and payable upon maturity in January 2030 | 7,075,000 | 8,075,000 | ||||||
| Various notes payable to a financial institution, secured by related equipment of the noncontrolling interest, payable in monthly installments ranging from $12,310 to $100,000, including interest at rates ranging from 6.37% to 9.00%, with maturities at various dates through May 2031 | 17,886,687 | 19,937,086 | ||||||
| Various notes payable to a financial institution, secured by related equipment of the noncontrolling interest, payable in monthly installments ranging from $7,353 to $38,291, including interest at rates ranging from 5.47% to 6.01%, with maturities at various dates through March 2032 | 9,047,308 | 6,956,394 | ||||||
| Various notes payable to a financial institution, secured by related equipment of the noncontrolling interest, payable in monthly installments ranging from $2,046 to $4,832, including interest at rates ranging from 7.20% to 10.34%, with maturities at various dates through April 2030 | 506,831 | 570,491 | ||||||
| Various notes payable to a financial institution, secured by related equipment of the noncontrolling interest, payable in monthly installments ranging from $28,824 to $37,195, including interest at rates ranging from 5.89% to 6.03%, with maturities at various dates through June 2032 | 3,408,433 | 1,293,729 | ||||||
| Notes payable to a financial institution, secured by related equipment of the noncontrolling interest, payable in monthly installments of $36,649, including interest at a rate of 5.87%, with a maturity date in May 2032 | 2,193,651 | - | ||||||
| Various notes payable to a financial institution, secured by related equipment of the noncontrolling interest, payable in monthly installments ranging from $2,168 to $32,485, including interest at rates ranging from 3.09% to 7.38%, with maturities at various dates through November 2030 | 4,612,908 | 5,308,207 | ||||||
| Various notes payable, secured by related equipment, payable in monthly installments ranging from $769 to $2,854, including interest at rates ranging from 2.90% to 10.99%, with maturities at various dates through December 2029 | 402,200 | 552,611 | ||||||
| 66,366,236 | 63,449,242 | |||||||
| Less current portion | (14,561,749 | ) | (13,121,577 | ) | ||||
| Noncurrent portion | $ | 51,804,487 | $ | 50,327,665 | ||||
Future maturities of the notes payable as of June 30, 2026 are as follows:
| Year Ending | ||||
| June 30, | ||||
| 2027 | $ | 14,561,749 | ||
| 2028 | 15,163,163 | |||
| 2029 | 14,592,635 | |||
| 2030 | 12,504,137 | |||
| 2031 | 7,178,201 | |||
| Thereafter | 2,366,351 | |||
| $ | 66,366,236 | |||
16
HANSEN & ADKINS, INC. AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2026
NOTE 8 – Related-Party Transactions
Leasing Activities
The Company leases offices from Farquhar, a related party under common ownership, pursuant to a written month-to-month arrangement requiring monthly rental payments of $103,210. Related-party rental expense under this agreement was approximately $620,000 for the six-month periods ended June 30, 2026 and 2025.
Due from Stockholders
At June 30, 2026 and December 31, 2025, the Company has outstanding advances to stockholders totaling $634,240 and $633,830, respectively. The advances are noninterest-bearing, and repayment terms have not been established.
Notes Receivable from Related Parties
At June 30, 2026 and December 31, 2025, the Company has outstanding notes receivable from related parties (see Note 3).
NOTE 9 – Commitments and Contingencies
Operating Leases
In addition to its related-party leases, the Company also leases equipment and facilities under operating leases that are short-term in nature. Rental expense for the six-month periods ended June 30, 2026 and 2025 totaled $1,917,505 and $2,536,340, respectively.
Legal Proceedings
The Company may be subject to various legal proceedings and claims arising in the ordinary course of its business. While the ultimate outcome of these matters is difficult to predict, management recognizes any anticipated losses in excess of insurance limits as expense when they become both probable and reasonably estimable. Management believes that the ultimate resolution of these matters will not have a material adverse effect on the Company’s consolidated financial position or results of operations.
17
HANSEN & ADKINS, INC. AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2026
NOTE 10 – Employee Benefit Plan
The Company offers a defined contribution employee benefit plan (the Plan) that includes a savings plan under Section 401(k) of the Internal Revenue Code. The Plan covers substantially all employees who have completed three months of consecutive service and are at least 21 years of age. Employees may contribute up to the maximum amount allowed by law, subject to certain Internal Revenue Service limitations. The Company makes a 25% matching contribution on employee contributions to the Plan and may also make discretionary profit-sharing contributions. Employees are immediately vested in their contributions and are vested over a period of five years for employer contributions. For the six-month periods ended June 30, 2026 and 2025, the Company contributed $554,211 and $466,444, respectively, to the Plan.
NOTE 11 – Supplemental Disclosures of Cash Flow Information
Cash paid for interest was $2,173,830 and $1,644,932 for the six-month periods ended June 30, 2026 and 2025, respectively.
Cash paid for state franchise taxes was $291,179 and $321,797 for the six-month periods ended June 30, 2026 and 2025, respectively.
Supplemental Schedule of Noncash Investing and Financing Activities
For the six-month periods ended June 30, 2026 and 2025, the Company sold equipment and vehicles in exchange for notes receivable totaling $110,000 and $64,859, respectively.
For the six-month periods ended June 30, 2026 and 2025, the Company financed $9,864,052 and $20,445,909 of equipment and vehicle purchases, respectively.
18
Exhibit 99.5
MCL McGill Carriers Ltd.
Financial Statements and Report of Independent
Certified Public
Accountants for the Years ended December 31, 2025 and 2024
TABLE OF CONTENTS
i
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
Board of Directors
MCL McGill Carriers Ltd.
Opinion
We have audited the financial statements of MCL McGill Carriers Ltd. (a British Columbia corporation) (the “Company”), which comprise the balance sheets as of December 31, 2025 and 2024, and the related statements of operations and comprehensive income, changes in stockholders’ equity, and cash flows for the years then ended, and the related notes to the financial statements.
In our opinion, the accompanying financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2025 and 2024, and the results of its operations and its cash flows for the years then ended in accordance with accounting principles generally accepted in the United States of America.
Basis for opinion
We conducted our audits of the financial statements in accordance with auditing standards generally accepted in the United States of America (US GAAS). Our responsibilities under those standards are further described in the Auditor’s Responsibilities for the Audit of the Financial Statements section of our report. We are required to be independent of the Company and to meet our other ethical responsibilities in accordance with the relevant ethical requirements relating to our audits. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.
Responsibilities of management for the financial statements
Management is responsible for the preparation and fair presentation of the financial statements in accordance with accounting principles generally accepted in the United States of America, and for the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error.
In preparing the financial statements, management is required to evaluate whether there are conditions or events, considered in the aggregate, that raise substantial doubt about the Company’s ability to continue as a going concern for one year after the date the financial statements are available to be issued.
1
Auditor’s responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance but is not absolute assurance and therefore is not a guarantee that an audit conducted in accordance with US GAAS will always detect a material misstatement when it exists. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. Misstatements are considered material if there is a substantial likelihood that, individually or in the aggregate, they would influence the judgment made by a reasonable user based on the financial statements.
In performing an audit in accordance with US GAAS, we:
| ● | Exercise professional judgment and maintain professional skepticism throughout the audit. |
| ● | Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, and design and perform audit procedures responsive to those risks. Such procedures include examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. |
| ● | Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control. Accordingly, no such opinion is expressed. |
| ● | Evaluate the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluate the overall presentation of the financial statements. |
| ● | Conclude whether, in our judgment, there are conditions or events, considered in the aggregate, that raise substantial doubt about the Company’s ability to continue as a going concern for a reasonable period of time. |
We are required to communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit, significant audit findings, and certain internal control-related matters that we identified during the audit.
/s/ GRANT THORNTON LLP
Tulsa, Oklahoma
October 23, 2026
2
Balance Sheets as of December 31, 2025 and 2024
| December 31, 2025 | December 31, 2024 | |||||||
| ASSETS | ||||||||
| Current assets: | ||||||||
| Cash | $ | 2,465,050 | $ | 2,462,438 | ||||
| Accounts receivable, net | 3,718,535 | 3,592,892 | ||||||
| Prepaid expenses | 462,181 | 143,949 | ||||||
| Income tax receivable | - | 82,350 | ||||||
| Other assets | - | 28,524 | ||||||
| Total current assets | 6,645,766 | 6,310,153 | ||||||
| Non-current assets: | ||||||||
| Property and equipment, net | 9,977,474 | 10,648,215 | ||||||
| Right-of-use asset, net | 1,243,871 | 1,526,145 | ||||||
| Total assets | $ | 17,867,111 | $ | 18,484,513 | ||||
| LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||
| Current liabilities: | ||||||||
| Accounts payable | $ | 2,096,589 | $ | 2,045,228 | ||||
| Accrued liabilities | 1,445,956 | 1,783,387 | ||||||
| Income taxes payable | 143,950 | - | ||||||
| Long-term debt, current | 2,343,836 | 1,852,456 | ||||||
| Operating lease liabilities, current | 431,654 | 359,810 | ||||||
| Finance lease liabilities, current | 104,817 | 85,407 | ||||||
| Total current liabilities | 6,566,802 | 6,126,288 | ||||||
| Non-current liabilities: | ||||||||
| Long-term debt | 4,825,063 | 6,473,426 | ||||||
| Operating lease liabilities | 704,802 | 1,035,262 | ||||||
| Finance lease liabilities | 140,698 | 195,798 | ||||||
| Deferred income taxes | 1,562,152 | 1,520,000 | ||||||
| Total liabilities | 13,799,517 | 15,350,774 | ||||||
| Commitments and contingencies (Note 8) | ||||||||
| Stockholders’ equity: | ||||||||
| Common stock | 1 | 1 | ||||||
| Accumulated other comprehensive loss | (26,597 | ) | (191,378 | ) | ||||
| Retained earnings | 4,094,190 | 3,325,116 | ||||||
| Total stockholders’ equity | 4,067,594 | 3,133,739 | ||||||
| Total liabilities and stockholders’ equity | $ | 17,867,111 | $ | 18,484,513 | ||||
The accompanying notes to the financial statements are an integral part of these statements.
3
Statements of Operations and Comprehensive Income for the years ended December 31, 2025 and 2024
| December 31, 2025 | December 31, 2024 | |||||||
| Operating revenue | ||||||||
| Transportation revenue | $ | 42,499,397 | $ | 40,450,519 | ||||
| Fuel revenue | 6,885,792 | 7,137,090 | ||||||
| Total operating revenue | 49,385,189 | 47,587,609 | ||||||
| Operating expenses | ||||||||
| Salaries & wages | 10,380,196 | 11,257,224 | ||||||
| Fuel & fuel taxes | 4,449,199 | 4,834,961 | ||||||
| Purchased transportation | 20,361,119 | 17,951,930 | ||||||
| Truck expenses | 6,437,029 | 7,051,162 | ||||||
| Depreciation & amortization | 2,097,296 | 1,928,986 | ||||||
| Gain on sale of equipment | (26,540 | ) | (90,509 | ) | ||||
| Insurance & claims | 2,047,129 | 2,153,837 | ||||||
| General & administrative | 1,352,286 | 1,580,688 | ||||||
| Total operating expenses | 47,097,714 | 46,668,279 | ||||||
| Operating income | 2,287,475 | 919,330 | ||||||
| Other income and (expense) | ||||||||
| Interest expense | (566,017 | ) | (515,061 | ) | ||||
| Other expense, net | (25,874 | ) | (28,224 | ) | ||||
| Foreign exchange gain (loss) | 1,825 | (74,796 | ) | |||||
| Total other expense, net | (590,066 | ) | (618,081 | ) | ||||
| Income before income taxes | 1,697,409 | 301,249 | ||||||
| Income tax expense | 427,104 | 78,094 | ||||||
| Net income | 1,270,305 | 223,155 | ||||||
| Other Comprehensive Income (Expense): | ||||||||
| Currency translation adjustment | 164,781 | (272,346 | ) | |||||
| Comprehensive Income (Loss) | $ | 1,435,086 | $ | (49,191 | ) | |||
The accompanying notes to the financial statements are an integral part of these statements.
4
Statements of Changes in Stockholders’ Equity for the years ended December 31, 2025 and 2024
| Common Stock Shares | Amount | Accumulated Other Comprehensive Income (Loss) | Retained Earnings | Total Equity | ||||||||||||||||
| Balance, December 31, 2023 | 100 | $ | 1 | $ | 80,968 | $ | 3,420,270 | $ | 3,501,239 | |||||||||||
| Dividends declared | - | - | - | (318,309 | ) | (318,309 | ) | |||||||||||||
| Net income | - | - | - | 223,155 | 223,155 | |||||||||||||||
| Currency translation adjustment | - | - | (272,346 | ) | - | (272,346 | ) | |||||||||||||
| Balance, December 31, 2024 | 100 | $ | 1 | $ | (191,378 | ) | $ | 3,325,116 | $ | 3,133,739 | ||||||||||
| Common Stock Shares | Amount | Accumulated Other Comprehensive Income (Loss) | Retained Earnings | Total Equity | ||||||||||||||||
| Balance, December 31, 2024 | 100 | $ | 1 | $ | (191,378 | ) | $ | 3,325,116 | $ | 3,133,739 | ||||||||||
| Dividends declared | - | - | - | (501,231 | ) | (501,231 | ) | |||||||||||||
| Net income | - | - | - | 1,270,305 | 1,270,305 | |||||||||||||||
| Currency translation adjustment | - | - | 164,781 | - | 164,781 | |||||||||||||||
| Balance, December 31, 2025 | 100 | $ | 1 | $ | (26,597 | ) | $ | 4,094,190 | $ | 4,067,594 | ||||||||||
The accompanying notes to the financial statements are an integral part of these statements.
5
Statements of Cash Flows for the years ended December 31, 2025 and 2024
| Year ended | ||||||||
| December 31, 2025 | December 31, 2024 | |||||||
| Cash flows from operating activities | ||||||||
| Net income | $ | 1,270,305 | $ | 223,155 | ||||
| Adjustments to reconcile net income to net cash provided by operating activities: | ||||||||
| Depreciation and amortization | 1,996,151 | 1,832,385 | ||||||
| Amortization of finance lease right-of-use assets | 101,145 | 96,601 | ||||||
| Gain on sale of equipment | (26,540 | ) | (90,509 | ) | ||||
| Noncash operating lease costs | 360,181 | 359,793 | ||||||
| Changes in operating assets and liabilities: | ||||||||
| Accounts receivable | 46,654 | 401,703 | ||||||
| Prepaid expenses | (305,818 | ) | (68,600 | ) | ||||
| Income taxes | 30,264 | (170,920 | ) | |||||
| Other assets | 29,373 | 4,750 | ||||||
| Accounts payable and accrued liabilities | (405,724 | ) | (1,165,455 | ) | ||||
| Operating lease liabilities | (371,081 | ) | (341,205 | ) | ||||
| Deferred income taxes | 165,407 | (47,801 | ) | |||||
| Net cash flows provided by operating activities | $ | 2,890,317 | $ | 1,033,897 | ||||
| Cash flows from investing activities | ||||||||
| Purchase of equipment | (523,706 | ) | (581,251 | ) | ||||
| Proceeds from sale of equipment | 114,962 | 241,083 | ||||||
| Net cash flows used by investing activities | $ | (408,744 | ) | $ | (340,168 | ) | ||
| Cash flows from financing activities | ||||||||
| Dividends paid | (557,786 | ) | (260,634 | ) | ||||
| Proceeds from long-term debt | - | 1,683,498 | ||||||
| Repayment of long-term debt | (1,670,513 | ) | (1,189,764 | ) | ||||
| Principal payments of finance lease | (109,175 | ) | (90,808 | ) | ||||
| Payments on related party debt | (258,104 | ) | (247,488 | ) | ||||
| Net cash flows used by financing activities | $ | (2,595,578 | ) | $ | (105,196 | ) | ||
| Net change in cash before effect of exchange rate changes | (114,005 | ) | 588,533 | |||||
| Effect of exchange rate changes on cash | 116,617 | (191,442 | ) | |||||
| Net increase in cash | 2,612 | 397,091 | ||||||
| Cash, beginning of period | 2,462,438 | 2,065,347 | ||||||
| Cash, end of period | $ | 2,465,050 | $ | 2,462,438 | ||||
| Supplementary disclosure of cash flow information: | ||||||||
| Cash paid for interest | $ | 565,117 | $ | 504,270 | ||||
| Cash paid for taxes | $ | 46,101 | $ | 298,430 | ||||
| Non-cash investing and financing activity: | ||||||||
| Purchase of equipment by way of long-term debt | $ | 397,843 | $ | 4,085,649 | ||||
| Repayment of long-term debt through proceeds of new long-term debt | $ | - | $ | 630,097 | ||||
| Right-of-use assets obtained in exchange for new operating leases | $ | 50,971 | $ | - | ||||
| Right-of-use assets obtained in exchange for new finance lease liabilities | $ | 60,800 | $ | 23,999 | ||||
| Dividends declared but unpaid at period end | $ | - | $ | 57,675 | ||||
The accompanying notes to the financial statements are an integral part of these statements.
6
Notes to the Financial Statements
| 1. | Organization and nature of operations |
MCL McGill Carriers Ltd. (the “Company”) was incorporated in 2000 under the laws of British Columbia. Its principal business activity is transportation of motor vehicles for the original manufacturers.
| 2. | Significant accounting policies and basis of presentation |
Basis of presentation — These financial statements and footnotes have been prepared in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”) and are intended to satisfy the financial statement requirements applicable to an acquired business for inclusion in filings with the U.S. Securities and Exchange Commission. The financial statements present the historical financial position, results of operations, and cash flows of MCL McGill Carriers Ltd. on a stand-alone basis for the periods presented. Subsequent to December 31, 2025, the Company was acquired by Proficient Auto Logistics, Inc. As a result of the transaction, the Company became an indirect subsidiary of Proficient Auto Logistics, Inc. Management believes the accompanying financial statements include all normal recurring adjustments necessary for a fair presentation in accordance with U.S. GAAP.
U.S. GAAP Conversion - The accompanying financial statements were prepared from the Company’s accounting records, which were maintained in accordance with Canadian Accounting Standards for Private Enterprises (“ASPE”). Certain adjustments and reclassifications have been made to convert the financial statements to conform with accounting principles generally accepted in the United States of America (“U.S. GAAP”). Such adjustments include, but are not limited to, differences in accounting for leases, revenue, and income taxes.
Use of estimates — The preparation of these financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates, and such differences could be material. Significant estimates include the accrual for insurance and claims liabilities; income tax liabilities; the useful lives and recoverable amounts of property, plant and equipment.
Foreign currency translation — The Company’s functional currency is the Canadian dollar (“CAD”). For reporting purposes, the accompanying financial statements have been translated into U.S. dollars (“USD”). Assets and liabilities are translated at period-end exchange rates, revenues and expenses at average exchange rates, and equity accounts at historical exchange rates. Translation adjustments are recorded in accumulated other comprehensive income.
Foreign currency transaction gains and losses arising from transactions denominated in currencies other than the functional currency are included in earnings in the period incurred.
Cash — Cash includes cash on hand and deposits held with banks. The Company maintains its cash with Canadian financial institutions that are members of the Canada Deposit Insurance Corporation (“CDIC”). The CDIC insures eligible deposits up to $100,000 (CAD) per insured category at each member institution. At times, the Company’s cash balances may exceed CDIC-insured limits. The Company has not experienced any losses on such amounts, and management believes it is not exposed to significant credit risk on cash.
Accounts receivable and allowance for credit loss — Accounts receivable represents customer obligations due under normal trade terms. The Company reviews accounts receivable on a continuing basis to determine if any receivables are potentially uncollectible. The Company writes off uncollectible receivables based on specifically identified amounts determined to be uncollectible. Actual write-offs could differ from management’s estimate. The Company maintains allowances for credit losses on its trade receivables. The Company estimates the allowance for credit losses by applying a loss rate based on historical write-offs, factors surrounding the credit risk of specific customers, and forecasts of future economic conditions. The Company maintains ongoing credit evaluations of its customers and has experienced minimal credit losses. The allowance for expected credit losses was immaterial for the years ended December 31, 2025 and 2024.
Property and equipment — Property and equipment are stated at cost and are depreciated straight line over their useful lives as follows:
| Asset group | Useful lives | |
| Leasehold improvements | 5-15 years | |
| Transportation equipment | 5-10 years | |
| Machinery and equipment | 5-7 years | |
| Software and computer equipment | 3-5 years | |
| Furniture and equipment | 2-7 years |
7
MCL McGill Carriers Ltd.
Notes to the Financial Statements
Leases — The Company accounts for leases under FASB ASU 2016-02, Leases (Topic 842) (“ASC 842”), which requires a lessee to recognize a right-of-use (“ROU”) asset and a corresponding lease liability on the balance sheet for substantially all leases with a term greater than twelve months. The Company applied ASC 842 the date the standard became effective for the Company, using the modified retrospective method, with the cumulative effect of initial application recognized as an adjustment to opening retained earnings as of that date. Because the date of initial application precedes the earliest period presented, the balance sheets and statements of operations for the years ended December 31, 2025 and 2024 are presented on a full ASC 842 basis and no transition adjustment is reflected within the periods presented.
The Company’s lease arrangements primarily consist of vehicle and fleet leases as well as office facilities. The Company determines whether a contract is or contains a lease at inception. A contract contains a lease if it conveys the right to control the use of identified property or vehicle for a period of time in exchange for consideration.
ROU assets represent the Company’s right to use an underlying asset during the lease term, and lease liabilities represent the obligation to make lease payments arising from the lease. Lease liabilities are measured at the commencement date at the present value of the remaining lease payments over the lease term, discounted using the rate implicit in the lease when readily determinable or, when it is not, the Company’s incremental borrowing rate. The lease term includes options to extend or terminate the lease when it is reasonably certain that the Company will exercise such options. ROU assets are measured at the corresponding lease liability amount, adjusted for any prepaid or accrued lease payments.
Lease expense for operating leases is recognized on a straight-line basis over the lease term. For finance leases, the Company recognizes amortization expense related to the ROU asset on a straight-line basis over the shorter of the lease term or the useful life of the underlying asset, and interest expense on the related lease liability using the effective interest method.
Leases are classified as finance leases when any of the criteria in ASC 842-10-25-2 are met at commencement; all other leases are classified as operating leases. The Company has elected the short-term lease exemption and does not recognize ROU assets or lease liabilities for leases with an initial term of twelve months or less; payments on such leases are recognized as expense on a straight-line basis over the lease term. The Company has also elected the practical expedient to not separate lease and non-lease components, and accounts for each lease and its associated non-lease components as a single lease component for all classes of underlying assets. Variable lease payments that do not depend on an index or rate are excluded from the measurement of lease liabilities and are recognized as expense in the period incurred. The Company’s finance leases consist of trucks and trailers with original lease terms of five years and certain vehicles with original lease terms of three to four years.
Revenue recognition — The Company derives its revenue primarily from vehicle transportation and related logistics services provided to automotive manufacturers, vehicle distributors, fleet operators, auction operations, and dealerships. Revenue is recognized when control of the promised services is transferred to customers in an amount that reflects the consideration to which the Company expects to be entitled. Contracts are accounted for when there is approval and commitment from both parties, the contract has commercial substance and collectability is probable. Each shipment accepted by the Company is generally considered a separate contract with a single performance obligation to provide transportation services and deliver the freight to its destination.
Revenue from transportation services is recognized over time as shipments move from origin to destination, reflecting the continuous satisfaction of the performance obligation as customers simultaneously receive and consume the benefits of the services as they are performed. Each individual shipment accepted by the Company is considered a separate contract with the performance obligation being the delivery of the freight. The average length of haul for each load of freight generally equals less than two days of continuous transit time. The Company has therefore applied the practical expedient and has not disclosed the amount of remaining unsatisfied performance obligations. The Company estimates revenue for loads based on transit time, as the customer simultaneously receives and consumes the benefit provided. The Company hauls freight and earns revenue on a consistent basis throughout the periods presented.
Fuel surcharges and other accessorial charges are considered part of the transaction price and are recognized as revenue as the related transportation services are performed.
The Company has elected to utilize the practical expedient in ASC 606-10-32-18 and does not account for the effects of a significant financing component if the period between when the Company transfers a good or service to the customer and when the customer pays for that good or service is one year or less. Customer contracts generally do not contain any material financing components as standard payment terms range from 30 to 60 days.
In some instances, the Company outsources the transportation of the loads to third-party carriers. The Company is a principal in these arrangements, as the Company has the primary responsibility to meet the customer’s requirements and have discretion over the pricing of the services charged to the customer. In these instances, the Company records the revenue collected on a gross basis, and recognizes the corresponding costs incurred within purchased transportation on the statements of operations.
8
MCL McGill Carriers Ltd.
Notes to the Financial Statements
The Company generally does not incur incremental costs in obtaining a contract from its customers. If the Company does incur such costs, these costs are expensed as incurred when the amortization period of the asset that otherwise would have been recognized is one year or less. The Company has elected the practical expedient provided by ASC 340-40 for such costs. These costs are included within General and administrative expenses in the statements of operations, if applicable. The Company had no material contract assets or contract liabilities as of December 31, 2025 and 2024.
During the years ended December 31, 2025 and 2024, the Company had three customers which represented approximately 45%, 13%, and 11%, and 41%, 14%, and 12%, respectively, of total revenue. For the years ended December 31, 2025 and 2024, these three customers accounted for approximately 69% and 76%, respectively, of gross accounts receivable.
Income taxes — The Company accounts for income taxes using the asset and liability method. Under this method, future income tax assets and liabilities are determined based on the differences between the accounting basis and the tax basis of assets and liabilities and are measured using the currently enacted or substantively enacted tax rates and laws expected to apply when these differences reverse. The Company establishes a valuation allowance against future income tax assets if, based on available information, it is more likely than not that some or all of the future income tax assets will not be realized.
Adoption of new accounting standards
In connection with the conversion of the Company’s financial statements from Canadian Accounting Standards for Private Enterprises (“ASPE”) to U.S. GAAP, the Company adopted ASU 2014-09, Revenue from Contracts with Customers (Topic 606). Under ASPE, revenue was generally recognized upon delivery of a vehicle. Under ASC 606, revenue is recognized over time as transportation services are performed. Management evaluated the impact of adoption and determined that the resulting differences, primarily related to shipments in transit at period end, were not material to the Company’s historical financial statements. Accordingly, adoption of ASC 606 did not have a material impact on the Company’s results of operations, financial position, or cash flows for the periods presented.
In connection with the conversion of the Company’s financial statements from ASPE to U.S. GAAP, the Company adopted ASU 842 using the modified retrospective transition method. ASC 842 requires lessees to recognize a ROU asset and a corresponding lease liability on the balance sheet for substantially all leases with a term greater than twelve months. See “Note 4”.
In connection with the conversion of the Company’s financial statements from ASPE to U.S. GAAP, the Company adopted ASU 2023-09, Income Taxes (Topic 740), which would require additional transparency for income tax disclosures, including the income tax rate reconciliation table and cash taxes paid both in the United States and foreign jurisdictions. This standard is effective for annual periods beginning after December 15, 2024. The Company has adopted the new disclosure requirements, and they did not have a material impact on the disclosures.
| 3. | Property and equipment |
Property and equipment, net of accumulated depreciation, consists of the following:
| December 31, 2025 | December 31, 2024 | |||||||
| Buildings and improvements | $ | 60,143 | $ | 52,251 | ||||
| Furniture and equipment | 61,719 | 46,277 | ||||||
| Machinery and equipment | 82,355 | 40,770 | ||||||
| Software and computer equipment | 85,810 | 65,541 | ||||||
| Transportation equipment | 19,137,376 | 17,516,867 | ||||||
| 19,427,403 | 17,721,706 | |||||||
| Less accumulated depreciation and amortization | (9,449,929 | ) | (7,073,491 | ) | ||||
| Property and equipment, net | $ | 9,977,474 | $ | 10,648,215 | ||||
The Company recognized depreciation expense of $2.0 million and $1.9 million during the years ended December 31, 2025 and 2024, respectively
9
MCL McGill Carriers Ltd.
Notes to the Financial Statements
| 4. | Right-of-use assets and lease liabilities |
Classification of ROU assets and lease liabilities as of December 31, 2025 and 2024 is as follows:
| December 31, 2025 | December 31, 2024 | |||||||
| Assets: | ||||||||
| Operating right-of-use assets | $ | 1,001,727 | $ | 1,255,953 | ||||
| Finance right-of-use assets | 242,144 | 270,192 | ||||||
| Total lease assets | $ | 1,243,871 | $ | 1,526,145 | ||||
| Liabilities: | ||||||||
| Current: | ||||||||
| Operating lease liabilities | $ | 431,654 | $ | 359,810 | ||||
| Finance lease liabilities | 104,817 | 85,407 | ||||||
| Noncurrent: | ||||||||
| Operating lease liabilities | 704,802 | 1,035,262 | ||||||
| Finance lease liabilities | 140,698 | 195,798 | ||||||
| Total lease liabilities | $ | 1,381,971 | $ | 1,676,277 | ||||
As of December 31, 2025 and 2024, the weighted-average discount rate for operating leases was 1.85% and 1.76%, respectively. The weighted-average remaining lease term as of December 31, 2025 and 2024 was 2.6 years and 3.6 years, respectively. As of December 31, 2025 and 2024, the weighted-average discount rate for finance leases was 5.48% and 5.21%, respectively, and the weighted-average remaining lease term was 2.4 years and 3.3 years, respectively.
Future minimum lease payments as of December 31, 2025 are as follows:
| Operating leases | Finance leases | |||||||
| For the year ending December 31: | ||||||||
| 2026 | $ | 448,484 | $ | 110,966 | ||||
| 2027 | 428,617 | 108,775 | ||||||
| 2028 | 263,410 | 40,240 | ||||||
| 2029 | 24,176 | 1,366 | ||||||
| Total undiscounted cash flows | 1,164,687 | 261,347 | ||||||
| Less: present value factor | (28,231 | ) | (15,832 | ) | ||||
| Total lease liabilities | 1,136,456 | 245,515 | ||||||
| Less: current portion | (431,654 | ) | (104,817 | ) | ||||
| Total long-term lease liabilities | $ | 704,802 | $ | 140,698 | ||||
Required supplemental information relating to leases for the years ended December 31, 2025 and 2024 is as follows:
| December 31, 2025 | December 31, 2024 | |||||||
| Operating lease cost | $ | 382,178 | $ | 388,050 | ||||
| Finance lease costs: | ||||||||
| Amortization of finance lease assets | 101,145 | 96,601 | ||||||
| Interest on lease liabilities | 14,664 | 17,387 | ||||||
| Short-term lease costs | - | 33,729 | ||||||
| Total lease costs | $ | 497,987 | $ | 535,767 | ||||
| 5. | Long-term debt |
Revolving line of credit
As of December 31, 2025 and 2024, the Company maintains a revolving line of credit of $0.7 million and $0.3 million, respectively, bearing interest at the bank’s annual prime lending rate plus 1%, secured by a general security agreement. The revolving line of credit remains undrawn. Fees on the facility were insignificant for the years ended December 31, 2025 and 2024.
10
MCL McGill Carriers Ltd.
Notes to the Financial Statements
Long-term debt
Long-term debt consists of equipment financing facilities, each secured by the specific trucks or trailers financed.
| December 31, 2025 | December 31, 2024 | |||||||
| Equipment and vehicle notes payable requiring monthly principal and interest payments totaling approximately $0.2 million. The notes bear interest ranging from 5.74% to 8.67%, maturing between December 2027 and November 2031, and are secured by the Company’s transportation equipment and vehicles | $ | 7,168,899 | $ | 8,325,882 | ||||
| Less: current maturities | (2,343,836 | ) | (1,852,456 | ) | ||||
| Total long-term debt | $ | 4,825,063 | $ | 6,473,426 | ||||
Future maturities of long-term debt are as follows for the years ending December 31:
| 2026 | $ | 2,343,836 | ||
| 2027 | 2,676,356 | |||
| 2028 | 872,768 | |||
| 2029 | 547,838 | |||
| 2030 | 418,013 | |||
| Thereafter | 310,088 | |||
| $ | 7,168,899 |
The Company’s equipment financing arrangements are secured by substantially all rights, title and interest in the financed transportation equipment. The Company has two promissory notes payable to Royal Truck Leasing LLC (“Royal Truck”), a company under common control, totaling $0.5 million and $0.7 million as of December 31, 2025 and 2024.
Interest expense on long-term debt was $0.5 million and $0.5 million for the years ended December 31, 2025 and 2024, respectively.
| 6. | Income taxes |
The Company is subject to taxation in Canada and files income tax returns in the applicable federal and provincial jurisdictions. Tax years ending after December 31, 2022 remain subject to examination by the applicable taxing authorities. The Company operates exclusively in Canada and is subject to Canadian federal and provincial income taxes. No material income tax expense or deferred taxes related to foreign jurisdictions outside Canada were recognized for the years ended December 31, 2025 and 2024.
Deferred Taxes
Deferred income taxes are recognized for temporary differences between the financial reporting carrying amounts of assets and liabilities and their respective tax bases using enacted tax rates expected to apply when the temporary differences reverse
11
MCL McGill Carriers Ltd.
Notes to the Financial Statements
Significant components of the Company’s deferred tax assets and liabilities were as follows:
| December 31, | December 31, | |||||||
| 2025 | 2024 | |||||||
| Deferred tax assets: | ||||||||
| Prepaid expenses | $ | 393 | $ | - | ||||
| Total deferred tax asset | $ | 393 | $ | - | ||||
| Deferred tax liabilities: | ||||||||
| Accrued liabilities | $ | (227,320 | ) | $ | (201,766 | ) | ||
| Operating lease liabilities | (76,203 | ) | (40,536 | ) | ||||
| Property and equipment, net | (1,230,274 | ) | (1,250,271 | ) | ||||
| Other deferred liabilities | (28,748 | ) | (27,427 | ) | ||||
| Total deferred tax liability | $ | (1,562,545 | ) | $ | (1,520,000 | ) | ||
| Net deferred tax liability | $ | (1,562,152 | ) | $ | (1,520,000 | ) | ||
Income tax expense consisted of the following:
| December 31, | ||||||||
| 2025 | 2024 | |||||||
| Current income tax expense | $ | 261,697 | $ | 125,895 | ||||
| Deferred income tax expense | 165,407 | (47,801 | ) | |||||
| Total income tax expense | $ | 427,104 | $ | 78,094 | ||||
The Company recognizes the effect of uncertain tax positions only if those positions are more likely than not to be sustained upon examination by the relevant taxing authorities. The Company has evaluated its tax positions and concluded that no material uncertain tax positions requiring recognition or disclosure existed as of December 31, 2025 and 2024.
| 7. | Related parties |
The Company is under common ownership with Hansen & Adkins Auto Transport, Inc. (“H&A”) and routinely enters into transactions with H&A and other entities under common ownership and control. These transactions are conducted in the normal course of business.
Royal Truck is a separate legal entity and a variable interest entity (“VIE”) for which H&A is the primary beneficiary. The Company leases certain trucks from Royal Truck and has outstanding financing arrangements with Royal Truck.
All related-party transactions are measured at the exchange amount, which is the amount of consideration established and agreed to by the parties. Management believes these transactions are entered into on terms consistent with those that would be available from unaffiliated third parties for similar services or financing arrangements.
Related party transactions
The Company’s transactions with related parties for the years ended December 31, 2025 and 2024 are as follows:
Payments for marketing, IT, and other cost sharing services of approximately $0.3 million and $0.2 million for the years ended December 31, 2025 and 2024, respectively which are recorded to general and administrative expenses.
Payments for outsourced claims processing costs of less than $0.1 million for the year ended December 31, 2024 which are recorded to general and administrative expenses. No such costs were incurred in 2025.
Related party leases
The Company leases five trucks and trailers from Royal Truck. The related agreements are accounted for as finance leases.
As of December 31, 2025 and 2024, the related party finance lease liability consisted of current portions of $0.1 million, and long-term portions of $0.1 million and $0.2 million, respectively. The related finance lease right of use asset had a net book value of $0.2 million as of December 31, 2025 and 2024, respectively. The Company paid lease payments to Royal Truck for approximately $0.1 million for the years ended December 31, 2025 and 2024.
The lease has a discount rate of 4.95% and expires on April 30, 2028. Amortization expense related to the finance lease ROU asset was $0.1 million for each of the years ended December 31, 2025 and 2024. Interest expense related to the finance lease liability was less than $0.1 million for each of the years ended December 31, 2025 and 2024. The Company made base lease payments to Royal Truck of $0.1 million for each of the years ended December 31, 2025 and 2024.
12
MCL McGill Carriers Ltd.
Notes to the Financial Statements
At December 31, 2025, the future maturities of the lease liabilities were as follows:
| For the year ending December 31: | ||||
| 2026 | $ | 82,441 | ||
| 2027 | 82,441 | |||
| 2028 | 27,480 | |||
| Total undiscounted cash flows | 192,362 | |||
| Less: present value factor | (10,331 | ) | ||
| Total lease liabilities | 182,031 | |||
| Less: current portion | (75,444 | ) | ||
| Total long-term lease liabilities | $ | 106,587 | ||
Related party debt
The Company has outstanding promissory notes payable to Royal Truck, a related party under common control. As of December 31, 2025 and 2024, the related party debt totaled $0.5 million and $0.7 million, respectively. The Company made payments on vehicle loans with Royal Truck of approximately $0.3 million for the years ended December 31, 2025 and 2024. The notes bear interest at 7.7%, mature in September 2027 and are generally secured on the same basis as the third-party facilities.
| 8. | Commitments and contingencies |
The Company is involved in certain claims and pending litigation primarily arising in the normal course of business. The majority of these claims relate to workers’ compensation, auto collision and liability, and physical and cargo damage. The Company expenses legal fees as incurred and accrues for the uninsured portion of contingent losses from these and other pending claims when it is both probable that a liability has been incurred, and the amount of the loss can be reasonably estimated. It is at least reasonably possible that the effect on the financial statements of significant estimates involving contingencies will change within one year of the date of the financial statements due to one or more future confirming events. If such changes occur, they could be material to the financial statements. The Company has disclosed all significant estimates and assumptions that could potentially be affected by future confirming events.
| 9. | Equity |
The Company is authorized to issue 10,000 common shares without par value and an unlimited number of Class A, Class B, and Class C non-voting preferred shares without par value. As of December 31, 2025 and 2024, there were 100 shares of Common stock issued and outstanding.
The common shares are voting shares and are entitled to dividends when and if declared by the Board of Directors. The non-voting preferred shares have rights and preferences as set forth in the Company’s articles of incorporation. In the event of liquidation, holders of preferred shares have priority over holders of common shares.
During the year ended December 31, 2025, the Company declared and paid cash dividends of approximately $0.6 million to its shareholders. During the year ended December 31, 2024, the Company declared and paid cash dividends of approximately $0.3 million. Dividends declared but unpaid of approximately $0.1 million as of December 31, 2024 were paid in 2025
| 10. | Subsequent events |
Management evaluated subsequent events through October 23, 2026, the date the financial statements were available to be issued.
Financing: Subsequent to December 31, 2025, the Company entered into debt financing arrangements with various lenders pursuant to which the Company borrowed approximately $3.4 million. The financing bears interest from 6.20% to 7.25% and matures at various dates in 2033. No amounts related to this financing arrangement have been recorded in the accompanying financial statements as of December 31, 2025.
Acquisition of the Company: On August 13, 2026, the Company was acquired by Proficient Auto Logistics, Inc. As a result of the transaction, MCL McGill Carriers Ltd. became an indirect subsidiary of Proficient Auto Logistics, Inc. The acquisition did not directly affect the Company’s assets, liabilities, or operations as of December 31, 2025, and therefore no adjustments have been made to the accompanying financial statements.
13
Exhibit 99.6
MCL McGill Carriers Ltd.
Financial Statements (Unaudited) for the Six Months ended June 30, 2026 and 2025
TABLE OF CONTENTS
i
Balance Sheets as of June 30, 2026 and December 31, 2025
(Unaudited)
| June 30, 2026 | December 31, 2025 | |||||||
| ASSETS | ||||||||
| Current assets: | ||||||||
| Cash | $ | 1,274,264 | $ | 2,465,050 | ||||
| Accounts receivable, net | 5,618,528 | 3,718,535 | ||||||
| Prepaid expenses | 291,455 | 462,181 | ||||||
| Total current assets | 7,184,247 | 6,645,766 | ||||||
| Non-current assets: | ||||||||
| Property and equipment, net | 12,104,068 | 9,977,474 | ||||||
| Right-of-use asset, net | 1,067,053 | 1,243,871 | ||||||
| Total assets | $ | 20,355,368 | $ | 17,867,111 | ||||
| LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||
| Current liabilities: | ||||||||
| Accounts payable | $ | 2,988,594 | $ | 2,096,589 | ||||
| Accrued liabilities | 1,459,998 | 1,445,956 | ||||||
| Income taxes payable | 138,697 | 143,950 | ||||||
| Long-term debt, current | 2,505,778 | 2,343,836 | ||||||
| Operating lease liabilities, current | 491,628 | 431,654 | ||||||
| Finance lease liabilities, current | 104,218 | 104,817 | ||||||
| Total current liabilities | 7,688,913 | 6,566,802 | ||||||
| Non-current liabilities: | ||||||||
| Long-term debt | 6,632,763 | 4,825,063 | ||||||
| Operating lease liabilities | 505,566 | 704,802 | ||||||
| Finance lease liabilities | 85,187 | 140,698 | ||||||
| Deferred income taxes | 1,457,887 | 1,562,152 | ||||||
| Total liabilities | 16,370,316 | 13,799,517 | ||||||
| Commitments and contingencies (Note 6) | ||||||||
| Stockholders’ equity: | ||||||||
| Common stock | 1 | 1 | ||||||
| Accumulated other comprehensive loss | (163,841 | ) | (26,597 | ) | ||||
| Retained earnings | 4,148,892 | 4,094,190 | ||||||
| Total stockholders’ equity | 3,985,052 | 4,067,594 | ||||||
| Total liabilities and stockholders’ equity | $ | 20,355,368 | $ | 17,867,111 | ||||
The accompanying notes to the financial statements are an integral part of these statements.
1
Statements of Operations and Comprehensive Income for the six months ended June 30, 2026 and 2025
(Unaudited)
| Six months ended June 30, | ||||||||
| 2026 | 2025 | |||||||
| Operating revenue | ||||||||
| Transportation revenue | $ | 22,681,519 | $ | 22,018,113 | ||||
| Fuel revenue | 4,582,939 | 3,777,266 | ||||||
| Total operating revenue | 27,264,458 | 25,795,379 | ||||||
| Operating expenses | ||||||||
| Salaries & wages | 5,721,814 | 5,193,974 | ||||||
| Fuel & fuel taxes | 2,664,918 | 2,310,123 | ||||||
| Purchased transportation | 12,318,647 | 10,362,980 | ||||||
| Truck expenses | 3,044,229 | 3,511,380 | ||||||
| Depreciation & amortization | 1,058,541 | 1,102,193 | ||||||
| Gain on sale of equipment | - | (23,746 | ) | |||||
| Insurance & claims | 1,022,179 | 1,114,561 | ||||||
| General & administrative | 964,209 | 744,137 | ||||||
| Total operating expenses | 26,794,537 | 24,315,602 | ||||||
| Operating income | 469,921 | 1,479,777 | ||||||
| Other income and (expense) | ||||||||
| Interest expense | (347,877 | ) | (303,862 | ) | ||||
| Other income, net | 3,156 | 22,507 | ||||||
| Foreign exchange (loss) gain | (3,677 | ) | 2,667 | |||||
| Total other expense, net | (348,398 | ) | (278,688 | ) | ||||
| Income before income taxes | 121,523 | 1,201,089 | ||||||
| Income tax expense | 66,821 | 302,674 | ||||||
| Net income | 54,702 | 898,415 | ||||||
| Other comprehensive (loss) income: | ||||||||
| Currency translation adjustment | (137,244 | ) | 203,914 | |||||
| Comprehensive (loss) income | $ | (82,542 | ) | $ | 1,102,329 | |||
The accompanying notes to the financial statements are an integral part of these statements.
2
Statements of Changes in Stockholders’ Equity for the six months ended June 30, 2026 and 2025
(Unaudited)
| Common Stock Shares | Amount | Accumulated Other Comprehensive Loss | Retained Earnings | Total Equity | ||||||||||||||||
| Balance, December 31, 2025 | 100 | $ | 1 | $ | (26,597 | ) | $ | 4,094,190 | $ | 4,067,594 | ||||||||||
| Net income | - | - | - | 54,702 | 54,702 | |||||||||||||||
| Currency translation adjustment | - | - | (137,244 | ) | - | (137,244 | ) | |||||||||||||
| Balance, June 30, 2026 | 100 | $ | 1 | $ | (163,841 | ) | $ | 4,148,892 | $ | 3,985,052 | ||||||||||
| Common Stock Shares | Amount | Accumulated Other Comprehensive Income (Loss) | Retained Earnings | Total Equity | ||||||||||||||||
| Balance, December 31, 2024 | 100 | $ | 1 | $ | (191,378 | ) | $ | 3,325,116 | $ | 3,133,739 | ||||||||||
| Dividends declared | - | - | - | (174,609 | ) | (174,609 | ) | |||||||||||||
| Net income | - | - | - | 898,415 | 898,415 | |||||||||||||||
| Currency translation adjustment | - | - | 203,914 | - | 203,914 | |||||||||||||||
| Balance, June 30, 2025 | 100 | $ | 1 | $ | 12,536 | $ | 4,048,922 | $ | 4,061,459 | |||||||||||
The accompanying notes to the financial statements are an integral part of these statements.
3
Statements of Cash Flows for the six months ended June 30, 2026 and 2025
(Unaudited)
| For the six months ended June 30, | ||||||||
| 2026 | 2025 | |||||||
| Cash flows from operating activities | ||||||||
| Net income | $ | 54,702 | $ | 898,415 | ||||
| Adjustments to reconcile net income to net cash provided by operating activities: | ||||||||
| Depreciation and amortization | 1,007,642 | 1,053,035 | ||||||
| Amortization of finance lease right-of-use assets | 50,899 | 49,158 | ||||||
| Gain on sale of equipment | - | (23,746 | ) | |||||
| Noncash operating lease costs | 220,592 | 177,138 | ||||||
| Changes in operating assets and liabilities: | ||||||||
| Accounts receivable | (2,085,057 | ) | (1,167,890 | ) | ||||
| Prepaid expenses | 159,999 | (145,685 | ) | |||||
| Income taxes | (121,034 | ) | 174,494 | |||||
| Other assets | - | 22,930 | ||||||
| Accounts payable and accrued liabilities | 1,055,077 | 187,375 | ||||||
| Operating lease liabilities | (236,492 | ) | (173,696 | ) | ||||
| Deferred income taxes | 66,821 | 82,010 | ||||||
| Net cash flows provided by operating activities | $ | 173,149 | $ | 1,133,538 | ||||
| Cash flows from investing activities | ||||||||
| Purchase of equipment | (99,172 | ) | (321,533 | ) | ||||
| Proceeds from sale of equipment | - | 113,999 | ||||||
| Net cash flows used by investing activities | $ | (99,172 | ) | $ | (207,534 | ) | ||
| Cash flows from financing activities | ||||||||
| Dividends paid | - | (230,689 | ) | |||||
| Repayment of long-term debt | (1,035,131 | ) | (800,621 | ) | ||||
| Principal payments of finance lease | (49,367 | ) | (59,875 | ) | ||||
| Payments on related party debt | (131,508 | ) | (127,291 | ) | ||||
| Net cash flows used by financing activities | $ | (1,216,006 | ) | $ | (1,218,476 | ) | ||
| Net decrease in cash before effect of exchange rate changes | (1,142,029 | ) | (292,472 | ) | ||||
| Effect of exchange rate changes on cash | (48,757 | ) | 129,996 | |||||
| Net decrease in cash | (1,190,786 | ) | (162,476 | ) | ||||
| Cash, beginning of period | 2,465,050 | 2,462,438 | ||||||
| Cash, end of period | $ | 1,274,264 | $ | 2,299,962 | ||||
| Supplementary disclosure of cash flow information: | ||||||||
| Cash paid for interest | $ | 245,248 | $ | 206,515 | ||||
| Cash paid for taxes | $ | 264,676 | $ | 45,715 | ||||
| Non-cash investing and financing activity: | ||||||||
| Purchase of equipment by way of long-term debt | $ | 3,441,979 | $ | - | ||||
| Right-of-use assets obtained in exchange for new operating leases | $ | 132,070 | $ | - | ||||
| Right-of-use assets obtained in exchange for new finance lease liabilities | $ | - | $ | 60,290 | ||||
The accompanying notes to the financial statements are an integral part of these statements.
4
Notes to the Financial Statements
(Unaudited)
| 1. | Organization and nature of operations |
MCL McGill Carriers Ltd. (the “Company”) was incorporated in 2000 under the laws of British Columbia. Its principal business activity is transportation of motor vehicles for the original manufacturers.
| 2. | Significant accounting policies and basis of presentation |
Basis of presentation — These financial statements and footnotes have been prepared in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”) and are intended to satisfy the financial statement requirements applicable to an acquired business for inclusion in filings with the U.S. Securities and Exchange Commission. The financial statements present the historical financial position, results of operations, and cash flows of MCL McGill Carriers Ltd. on a stand-alone basis for the periods presented. Subsequent to June 30, 2026, the Company was acquired by Proficient Auto Logistics, Inc. As a result of the transaction, the Company became an indirect subsidiary of Proficient Auto Logistics, Inc. Management believes the accompanying financial statements include all normal recurring adjustments necessary for a fair presentation in accordance with U.S. GAAP.
The accompanying condensed financial statements as of June 30, 2026 and for the six months ended June 30, 2026 and 2025 are unaudited and have been prepared for interim financial information and Article 10 of Regulation S-X. Accordingly, they do not include all disclosures required for complete financial statements and should be read in conjunction with the audited financial statements for the years ended December 31, 2025 and 2024. Results of the interim period are not necessarily indicative of results for the full year.
U.S. GAAP Conversion — The accompanying financial statements were prepared from the Company’s accounting records, which were maintained in accordance with Canadian Accounting Standards for Private Enterprises (“ASPE”). Certain adjustments and reclassifications have been made to convert the financial statements to conform with accounting principles generally accepted in the United States of America (“U.S. GAAP”). Such adjustments include, but are not limited to, differences in accounting for leases, revenue, and income taxes.
Use of estimates — The preparation of these financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates, and such differences could be material. Significant estimates include the accrual for insurance and claims liabilities; income tax liabilities; the useful lives and recoverable amounts of property, plant and equipment.
Foreign currency translation — The Company’s functional currency is the Canadian dollar (“CAD”). For reporting purposes, the accompanying financial statements have been translated into U.S. dollars (“USD”). Assets and liabilities are translated at period-end exchange rates, revenues and expenses at average exchange rates, and equity accounts at historical exchange rates. Translation adjustments are recorded in accumulated other comprehensive income.
Foreign currency transaction gains and losses arising from transactions denominated in currencies other than the functional currency are included in earnings in the period incurred.
Revenue concentration — During the six months ended June 30, 2026 and 2025, the Company had three customers which represented approximately 46%, 12%, and 9%, and 45%, 13%, and 10%, respectively, of total revenue.
| 3. | Property and equipment |
Property and equipment, net of accumulated depreciation, consists of the following:
| June 30, 2026 | December 31, 2025 | |||||||
| Buildings and improvements | $ | 62,906 | $ | 60,143 | ||||
| Furniture and equipment | 59,661 | 61,719 | ||||||
| Machinery and equipment | 79,609 | 82,355 | ||||||
| Software and computer equipment | 82,948 | 85,810 | ||||||
| Transportation equipment | 22,171,705 | 19,137,376 | ||||||
| 22,456,829 | 19,427,403 | |||||||
| Less accumulated depreciation and amortization | (10,352,761 | ) | (9,449,929 | ) | ||||
| Property and equipment, net | $ | 12,104,068 | $ | 9,977,474 | ||||
The Company recognized depreciation expense of $1.1 million and $1.1 million during the six months ended June 30, 2026 and 2025, respectively.
5
MCL McGill Carriers Ltd
Notes to the Financial Statements
| 4. | Long-term debt |
Revolving line of credit
As of June 30, 2026 and December 31, 2025, the Company maintains an undrawn revolving line of credit of $0.7 million, bearing interest at the bank’s annual prime lending rate plus 1%, secured by a general security agreement. The revolving line of credit remains undrawn. Fees on the facility were insignificant for the six months ended June 30, 2026 and 2025.
Long-term debt
Long-term debt consists of equipment financing facilities, each secured by the specific trucks or trailers financed.
| June 30, 2026 | December 31, 2025 | |||||||
| Equipment and vehicle notes payable requiring monthly principal and interest payments totaling approximately $0.2 million. The notes bear interest ranging from 5.74% to 8.67%, maturing between December 2027 and November 2031, and are secured by the Company’s transportation equipment and vehicles | $ | 9,138,541 | $ | 7,168,899 | ||||
| Less: current maturities | (2,505,778 | ) | (2,343,836 | ) | ||||
| Total long-term debt | $ | 6,632,763 | $ | 4,825,063 | ||||
Future maturities of long-term debt are as follows:
| 2026 remaining | $ | 1,393,250 | ||
| 2027 | 2,959,801 | |||
| 2028 | 1,280,705 | |||
| 2029 | 995,949 | |||
| 2030 | 901,771 | |||
| Thereafter | 1,607,065 | |||
| $ | 9,138,541 |
The Company’s equipment financing arrangements are secured by substantially all rights, title and interest in the financed transportation equipment. The Company has two promissory notes payable to Royal Truck Leasing LLC (“Royal Truck”), a company under common control, totaling $0.4 million and $0.5 million as of June 30, 2026 and December 31, 2025, respectively. The notes bear interest at prime plus 1% and are secured on the same basis as the third-party facilities.
Interest expense on long-term debt was $0.3 million and $0.3 million for the six months ended June 30, 2026 and 2025, respectively.
| 5. | Related parties |
The Company is under common ownership with Hansen & Adkins Auto Transport, Inc. (“H&A”) and routinely enters into transactions with H&A and other entities under common ownership and control. These transactions are conducted in the normal course of business.
Royal Truck is a separate legal entity and a variable interest entity (“VIE”) for which H&A is the primary beneficiary. The Company leases certain trucks from Royal Truck and has outstanding financing arrangements with Royal Truck.
All related-party transactions are measured at the exchange amount, which is the amount of consideration established and agreed to by the parties. Management believes these transactions are entered into on terms consistent with those that would be available from unaffiliated third parties for similar services or financing arrangements.
Related party transactions
The Company’s transactions with related parties for the six months ended June 30, 2026 and 2025 are as follows:
Payments for marketing, IT, and other cost sharing services of approximately $0.2 million for the six months ended June 30, 2026 and 2025, respectively which are recorded to general and administrative expenses.
6
MCL McGill Carriers Ltd
Notes to the Financial Statements
Related party leases
The Company leases five trucks and trailers from Royal Truck. The related agreements are accounted for as finance leases.
As of June 30, 2026 and December 31, 2025, the related party finance lease liability consisted of current and long-term portions of $0.1 million. The related finance lease right of use asset had a net book value of $0.1 million and $0.2 million as of June 30, 2026 and December 31, 2025, respectively.
The lease has a discount rate of 4.95% and expires on April 30, 2028. Amortization expense related to the finance lease ROU asset was less than $0.1 million for each of the six months ended June 30, 2026 and 2025. Interest expense related to the finance lease liability was less than $0.1 million for each of the six months ended June 30, 2026 and 2025. The Company made base lease payments to Royal Truck of less than $0.1 million for each of the six months ended June 30, 2026 and 2025.
At June 30, 2026, the future maturities of the lease liabilities were as follows:
| For the year ending December 31: | ||||
| 2026 remaining | $ | 39,846 | ||
| 2027 | 79,692 | |||
| 2028 | 26,564 | |||
| Total undiscounted cash flows | 146,102 | |||
| Less: present value factor | (6,153 | ) | ||
| Total lease liabilities | 139,949 | |||
| Less: current portion | (74,758 | ) | ||
| Total long-term lease liabilities | $ | 65,191 | ||
Related party debt
The Company has two outstanding promissory notes payable to Royal Truck, a related party under common control, totaling $0.4 million and $0.5 million as of June 30, 2026 and December 31, 2025, respectively. The Company made payments on vehicle loans with Royal of approximately $0.1 million for the six months ended June 30, 2026 and 2025.
| 6. | Commitments and contingencies |
The Company is involved in certain claims and pending litigation primarily arising in the normal course of business. The majority of these claims relate to workers’ compensation, auto collision and liability, and physical and cargo damage. The Company expenses legal fees as incurred and accrues for the uninsured portion of contingent losses from these and other pending claims when it is both probable that a liability has been incurred, and the amount of the loss can be reasonably estimated. It is at least reasonably possible that the effect on the financial statements of significant estimates involving contingencies will change within one year of the date of the financial statements due to one or more future confirming events. If such changes occur, they could be material to the financial statements. The Company has disclosed all significant estimates and assumptions that could potentially be affected by future confirming events.
| 7. | Subsequent events |
Management evaluated subsequent events through October 23, 2026, the date the financial statements were available to be issued.
On August 13, 2026, the Company was acquired by Proficient Auto Logistics, Inc. As a result of the transaction, MCL McGill Carriers Ltd. became an indirect subsidiary of Proficient Auto Logistics, Inc. The acquisition did not directly affect the Company’s assets, liabilities, or operations as of June 30, 2026, and therefore no adjustments have been made to the accompanying financial statements.
7
Exhibit 99.7
UNAUDITED PRO FORMA FINANCIAL INFORMATION
On August 13, 2026 (the “Closing Date”), Proficient Auto Logistics, Inc. (“PAL” or the “Company”), through its wholly owned subsidiaries Proficient Services, Inc. (“US Buyer”) and H&A CN Acquisition, Ltd. (“Canada Buyer” and, together with US Buyer, the “Buyers”), completed the acquisition (the “Acquisition”) of all of the issued and outstanding equity interests of Hansen & Adkins Auto Transport, LLC (“H&A Auto Transport”), Hansen & Adkins Auto Logistics, LLC (“H&A Auto Logistics”), Royal Truck Leasing, LLC (“Royal”) and Hansen & Adkins Canada Ltd. (“H&A Canada”) pursuant to the Equity Purchase Agreement, dated as of August 10, 2026 (the “Purchase Agreement”), by and among the Buyers, Steven Hansen, Louie Adkins, Hansen & Adkins, Inc., Royal Holdco, LLC, The Steven Hansen Separate Property Trust and The Louie Adkins 2024 Trust (collectively, the “Sellers”), and Steven Hansen, in his capacity as seller representative (the “Seller Representative”). H&A Auto Transport, H&A Auto Logistics and Royal are referred to collectively as “H&A.” Upon completion of the Acquisition, MCL McGill Carriers Ltd. (“MCL”) became a subsidiary of H&A Canada. For purposes of the historical financial information and the unaudited pro forma condensed combined financial information, MCL’s historical financial information is presented under the caption “H&A Canada.” H&A and H&A Canada are referred to collectively as the “acquired businesses.” The acquired businesses provide new and used vehicle transportation and logistics services in the United States and Canada. The Acquisition expanded PAL’s scale, service capabilities and geographic presence, including its entry into Canada.
The Purchase Agreement provided for a base purchase price of $130.0 million, subject to customary adjustments for closing indebtedness, cash, transaction expenses and net working capital. For purposes of the preliminary purchase price allocation accounting, preliminary purchase consideration was approximately $62.8 million, consisting of approximately $60.5 million of cash consideration and approximately $2.2 million representing the acquisition-date fair value of 421,354 shares of PAL common stock issued as consideration. Contemporaneous with the closing of the Acquisition, PAL also repaid outstanding indebtedness and paid certain seller transaction expenses. The Sellers are eligible to receive up to $22.1 million of additional contingent consideration (the “Earnout”) based on the acquired businesses’ 2026 earnings before interest, taxes, depreciation, and amortization (“EBITDA”), and the purchase price remains subject to customary post-closing adjustments. The preliminary purchase price allocation includes fair value adjustments to acquired property and equipment, approximately $18.2 million of identifiable intangible assets, principally customer relationships and trade names, and goodwill attributable in part to the assembled workforce and expected operating synergies. The allocation, including the estimated fair values and useful lives of the acquired assets, remains preliminary and may be revised as the valuation process is completed. See Notes 1 and 3 for additional information regarding the Acquisition, consideration transferred and preliminary purchase price allocation.
PAL financed the Acquisition with cash on hand. PAL financed the debt repayment with the net proceeds from the issuance of $75.0 million aggregate principal amount of 5.500% Convertible Notes due 2033 (the “Convertible Notes”) and $82.0 million of borrowings under the M&T equipment financing agreement (the “M&T Credit Agreement”). In connection with the issuance of the Convertible Notes, PAL also entered into capped call transactions (the “Capped Calls” and, together with the issuance of the Convertible Notes and the M&T Credit Agreement borrowings, the “Financing Transactions”). The premium in respect of the Capped Calls was paid with the net proceeds from the issuance of the Convertible Notes. The unaudited pro forma condensed combined financial information reflects the Financing Transactions, the repayment of certain historical indebtedness and the related adjustments to interest expense and financing costs. See Notes 1, 4 and 5 for additional information regarding the Financing Transactions and related pro forma adjustments.
The following unaudited pro forma condensed combined financial information has been prepared in accordance with Article 11 of Regulation S-X. The unaudited pro forma condensed combined balance sheet as of June 30, 2026 gives effect to the Acquisition and related Financing Transactions as if they had occurred on June 30, 2026. The unaudited pro forma condensed combined statements of operations for the year ended December 31, 2025 and the six months ended June 30, 2026 give effect to the Acquisition and related Financing Transactions as if they had occurred on January 1, 2025. The transaction accounting adjustments reflect the application of the acquisition method of accounting under Accounting Standards Codification (“ASC”) Topic 805, Business Combinations, with PAL identified as the accounting acquirer.
The unaudited pro forma condensed combined financial information was derived from, and should be read together with, PAL’s audited consolidated financial statements for the year ended December 31, 2025 and unaudited condensed consolidated financial statements as of and for the six months ended June 30, 2026, included in PAL’s Annual Report on Form 10-K for the year ended December 31, 2025 and Quarterly Report on Form 10-Q for the quarter ended June 30, 2026, respectively. It should also be read together with the historical financial statements of H&A and H&A Canada included as Exhibits 99.3 through 99.6 to this Current Report on Form 8-K/A. The historical financial statements of H&A and H&A Canada were prepared in accordance with accounting principles generally accepted in the United States (“U.S. GAAP”) and are presented in U.S. dollars.
The unaudited pro forma condensed combined financial information is presented for informational purposes only and is not necessarily indicative of the financial position or results of operations that would have been achieved had the Acquisition and related Financing Transactions occurred on the dates indicated. It also is not indicative of the future financial position or results of operations of the combined company. The pro forma adjustments are based on currently available information and assumptions that management believes are reasonable. The preliminary purchase price allocation was prepared solely for purposes of this unaudited pro forma condensed combined financial information and may differ materially from the final allocation upon completion of the valuation of the assets acquired and liabilities assumed. See Note 3.
1
PROFICIENT AUTO LOGISTICS, INC.
Unaudited Pro Forma Condensed Combined Balance Sheet
As of June 30, 2026
| Proficient Auto Logistics Historical | H&A Historical | H&A Canada Historical (Note 2) | Transaction Accounting Adjustments | Note | Pro Forma Combined | |||||||||||||||||
| ASSETS | ||||||||||||||||||||||
| Current assets: | ||||||||||||||||||||||
| Cash and cash equivalents | $ | 8,130,738 | $ | 15,246,663 | $ | 1,274,264 | $ | (3,457,814 | ) | (a) (c) (d) (i) (l) | $ | 21,193,851 | ||||||||||
| Accounts receivable, net | 53,744,352 | 28,811,492 | 5,618,528 | 405,727 | (l) | 88,580,099 | ||||||||||||||||
| Net investment in leases, current portion | 81,206 | - | - | 126,179 | (f) (l) | 207,385 | ||||||||||||||||
| Maintenance supplies | 2,081,732 | - | - | - | 2,081,732 | |||||||||||||||||
| Assets held for sale | 606,572 | - | - | 1,112,500 | (g) | 1,719,072 | ||||||||||||||||
| Due from Stockholders | - | 634,240 | - | (634,240 | ) | (e) | - | |||||||||||||||
| Notes receivable, current portion | - | 899,076 | - | (899,076 | ) | (e) (l) | - | |||||||||||||||
| Income tax receivable | 1,650,993 | - | - | - | 1,650,993 | |||||||||||||||||
| Prepaid expenses and other current assets | 6,757,045 | 6,530,826 | 291,455 | (406,824 | ) | (l) | 13,172,502 | |||||||||||||||
| Total current assets | 73,052,638 | 52,122,297 | 7,184,247 | (3,753,548 | ) | 128,605,634 | ||||||||||||||||
| Property and equipment, net | 102,912,089 | 56,337,113 | 12,104,068 | 17,605,408 | (e) (g) (l) | 188,958,678 | ||||||||||||||||
| Operating lease right-of-use assets | 11,401,032 | - | 882,392 | - | 12,283,424 | |||||||||||||||||
| Finance lease right-of-use assets | - | - | 184,661 | (129,674 | ) | (f) | 54,987 | |||||||||||||||
| Net investment in leases, less current portion | - | - | - | 113,360 | (f) (l) | 113,360 | ||||||||||||||||
| Notes receivable, noncurrent portion | - | 4,799,221 | - | (4,799,221 | ) | (e) (l) | - | |||||||||||||||
| Deposits | 5,984,457 | 1,542,453 | - | 76,754 | (l) | 7,603,664 | ||||||||||||||||
| Goodwill | 148,643,673 | - | - | 22,809,849 | (a) (b) (d) (f) (g) (h) (j) (k) (l) | 171,453,522 | ||||||||||||||||
| Intangible assets, net | 117,975,387 | - | - | 18,200,000 | (h) | 136,175,387 | ||||||||||||||||
| Other long-term assets | 534,121 | - | - | (76,754 | ) | (d) | 457,367 | |||||||||||||||
| Total assets | $ | 460,503,397 | $ | 114,801,084 | $ | 20,355,368 | $ | 50,046,174 | $ | 645,706,023 | ||||||||||||
| LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||||||||||||||||
| Current liabilities: | ||||||||||||||||||||||
| Accounts payable | $ | 11,336,163 | $ | 7,851,067 | $ | 2,988,594 | $ | (340,640 | ) | (l) | $ | 21,835,184 | ||||||||||
| Accrued liabilities | 28,593,388 | 18,451,552 | 1,598,695 | 340,644 | (l) | 48,984,279 | ||||||||||||||||
| Contingent consideration | - | - | - | - | - | |||||||||||||||||
| Finance lease liabilities, current portion | - | - | 104,218 | (74,758 | ) | (f) | 29,460 | |||||||||||||||
| Operating lease liabilities, current portion | 2,587,294 | - | 491,628 | - | 3,078,922 | |||||||||||||||||
| Long-term debt, current portion | 19,162,469 | 14,561,749 | 2,505,778 | (1,858,431 | ) | (c) (d) (f) | 34,371,565 | |||||||||||||||
| Total current liabilities | 61,679,314 | 40,864,368 | 7,688,913 | (1,933,185 | ) | 108,299,410 | ||||||||||||||||
| Long-term liabilities: | ||||||||||||||||||||||
| Line of credit | 6,700,000 | - | - | - | 6,700,000 | |||||||||||||||||
| Operating lease liabilities, less current portion | 9,366,749 | - | 505,566 | - | 9,872,315 | |||||||||||||||||
| Finance lease liabilities, less current portion | - | - | 85,187 | (65,192 | ) | (f) | 19,995 | |||||||||||||||
| Long-term debt, less current portion | 44,582,063 | 51,804,487 | 6,632,763 | (159,963 | ) | (c) (d) (f) (l) | 102,859,350 | |||||||||||||||
| Convertible notes payable | - | - | - | 72,375,000 | (c) | 72,375,000 | ||||||||||||||||
| Deferred tax liability, net | 32,016,854 | - | 1,457,887 | 9,151,858 | (j) | 42,626,599 | ||||||||||||||||
| Other long-term liabilities | 2,973,049 | 8,777,637 | - | 44,443 | (d) (l) | 11,795,129 | ||||||||||||||||
| Total liabilities | 157,318,029 | 101,446,492 | 16,370,316 | 79,412,961 | 354,547,798 | |||||||||||||||||
| Stockholders’ equity: | ||||||||||||||||||||||
| Common stock | 280,529 | 120,000 | 1 | (115,788 | ) | (b) (k) | 284,742 | |||||||||||||||
| Additional paid-in capital | 358,358,051 | 20,915,648 | - | (27,846,545 | ) | (b) (c) (k) | 351,427,154 | |||||||||||||||
| Accumulated other comprehensive income | - | - | (163,841 | ) | 163,841 | (k) | - | |||||||||||||||
| Accumulated deficit | (55,453,212 | ) | (26,571,042 | ) | 4,148,892 | 17,321,691 | (c) (d) (e) (i) (k) | (60,553,671 | ) | |||||||||||||
| Noncontrolling interest | - | 18,889,986 | - | (18,889,986 | ) | (k) | - | |||||||||||||||
| Total stockholders’ equity | 303,185,368 | 13,354,592 | 3,985,052 | (29,366,787 | ) | 291,158,225 | ||||||||||||||||
| Total liabilities and stockholders’ equity | $ | 460,503,397 | $ | 114,801,084 | $ | 20,355,368 | $ | 50,046,174 | $ | 645,706,023 | ||||||||||||
See accompanying notes to the unaudited pro forma condensed combined financial information.
2
PROFICIENT AUTO LOGISTICS, INC.
Unaudited Pro Forma Condensed Combined Statement of Operations and Comprehensive Income
Year Ended December 31, 2025
| Proficient Auto Logistics Historical | H&A Historical | H&A Canada Historical (Note 2) | Transaction Accounting Adjustments | Note | Pro Forma Combined | |||||||||||||||||
| Operating revenue | ||||||||||||||||||||||
| Revenue, before fuel surcharge | $ | 396,627,459 | $ | - | $ | 42,499,397 | $ | 325,131,197 | (aa) (hh) | $ | 764,258,053 | |||||||||||
| Fuel surcharge and other reimbursements | 25,887,757 | - | 6,885,792 | 18,017,265 | (hh) | 50,790,814 | ||||||||||||||||
| Other revenue | 4,383,874 | - | - | 2,341,930 | (hh) | 6,725,804 | ||||||||||||||||
| Lease revenue | 3,526,084 | - | - | (80,990 | ) | (aa) | 3,445,094 | |||||||||||||||
| H&A Operating revenue | - | 345,203,677 | - | (345,203,677 | ) | - | ||||||||||||||||
| Total operating revenue | 430,425,174 | 345,203,677 | 49,385,189 | 205,725 | 825,219,765 | |||||||||||||||||
| Cost of sales | - | 298,616,835 | - | (298,616,835 | ) | (hh) | - | |||||||||||||||
| Operating expenses | ||||||||||||||||||||||
| Salaries, wages and benefits | 85,242,607 | - | 10,380,196 | 99,655,778 | (hh) | 195,278,581 | ||||||||||||||||
| Stock-based compensation | 5,527,316 | - | - | - | 5,527,316 | |||||||||||||||||
| Fuel and fuel taxes | 25,757,819 | - | 4,449,199 | 25,803,619 | (hh) | 56,010,637 | ||||||||||||||||
| Purchased transportation | 215,153,626 | - | 20,361,119 | 137,962,645 | (aa) (hh) | 373,477,390 | ||||||||||||||||
| Truck expenses | 25,549,240 | - | 6,437,029 | 28,026,463 | (hh) | 60,012,732 | ||||||||||||||||
| Depreciation | 29,526,381 | - | 2,097,296 | 8,983,048 | (aa) (bb) (hh) | 40,606,725 | ||||||||||||||||
| Intangible amortization | 9,779,749 | - | - | 1,306,000 | (cc) | 11,085,749 | ||||||||||||||||
| Loss (gain) on sale of equipment | (257,864 | ) | (2,153,327 | ) | (26,540 | ) | - | (2,437,731 | ) | |||||||||||||
| Goodwill and intangibles impairment | 27,787,000 | - | - | - | 27,787,000 | |||||||||||||||||
| Insurance premiums and claims | 24,205,671 | - | 2,047,129 | 19,511,262 | (hh) | 45,764,062 | ||||||||||||||||
| General, selling, and other operating expenses | 17,488,511 | 39,441,417 | 1,352,286 | (22,591,830 | ) | (aa) (hh) | 35,690,384 | |||||||||||||||
| Total operating expenses | 465,760,056 | 37,288,090 | 47,097,714 | 298,656,985 | 848,802,845 | |||||||||||||||||
| Operating (loss) income | (35,334,882 | ) | 9,298,752 | 2,287,475 | 165,575 | (23,583,080 | ) | |||||||||||||||
| Other income and (expense) | ||||||||||||||||||||||
| Interest expense | (6,588,973 | ) | (3,728,335 | ) | (566,017 | ) | (5,551,591 | ) | (aa) (dd) (ee) (hh) | (16,434,916 | ) | |||||||||||
| Acquisition costs | (438,514 | ) | - | - | (4,405,997 | ) | (ff) | (4,844,511 | ) | |||||||||||||
| Adjustment of earn out contingency | - | - | - | - | - | |||||||||||||||||
| Restructuring costs | (1,243,171 | ) | - | - | - | (1,243,171 | ) | |||||||||||||||
| Interest income | - | 541,893 | - | (278,932 | ) | (hh) | 262,961 | |||||||||||||||
| Other income, net | 364,326 | 1,491,830 | (24,049 | ) | (2,990,280 | ) | (aa) (ff) (hh) | (1,158,173 | ) | |||||||||||||
| Total other income (expense), net | (7,906,332 | ) | (1,694,612 | ) | (590,066 | ) | (13,226,800 | ) | (23,417,810 | ) | ||||||||||||
| (Loss) income before income taxes | (43,241,214 | ) | 7,604,140 | 1,697,409 | (13,061,225 | ) | (47,000,890 | ) | ||||||||||||||
| Income tax (benefit) expense | (7,221,648 | ) | (254,484 | ) | 427,104 | (1,707,248 | ) | (gg) (hh) | (8,756,276 | ) | ||||||||||||
| Net (loss) income | (36,019,566 | ) | 7,858,624 | 1,270,305 | (11,353,977 | ) | (38,244,614 | ) | ||||||||||||||
| Less: Net income attributable to noncontrolling interest | - | 1,009,347 | - | (1,009,347 | ) | (hh) | - | |||||||||||||||
| Net (loss) income attributable to Proficient Auto Logistics, Inc. | (36,019,566 | ) | 6,849,277 | 1,270,305 | (10,344,630 | ) | (38,244,614 | ) | ||||||||||||||
| Other comprehensive (loss) income - foreign currency translation (MCL) | - | - | 164,781 | (164,781 | ) | (hh) | - | |||||||||||||||
| Comprehensive (loss) income | (36,019,566 | ) | 7,858,624 | 1,435,086 | (11,518,758 | ) | (38,244,614 | ) | ||||||||||||||
| Less: Comprehensive income attributable to noncontrolling interest | - | 1,009,347 | - | (1,009,347 | ) | (hh) | - | |||||||||||||||
| Comprehensive (loss) income attributable to Proficient Auto Logistics, Inc. | $ | (36,019,566 | ) | $ | 6,849,277 | $ | 1,435,086 | $ | (10,509,411 | ) | $ | (38,244,614 | ) | |||||||||
| Net (loss) income per share - basic and diluted | $ | (1.31 | ) | $ | (1.37 | ) | ||||||||||||||||
| Weighted average shares - basic and diluted | 27,578,622 | 421,354 | (ii) | 27,999,976 | ||||||||||||||||||
See accompanying notes to the unaudited pro forma condensed combined financial information.
3
PROFICIENT AUTO LOGISTICS, INC.
Unaudited Pro Forma Condensed Combined Statement of Operations and Comprehensive Income
Six Months Ended June 30, 2026
| Proficient Auto Logistics Historical | H&A Historical | H&A Canada Historical (Note 2) | Transaction Accounting Adjustments | Note | Pro Forma Combined | |||||||||||||||||
| Operating revenue | ||||||||||||||||||||||
| Revenue, before fuel surcharge | $ | 182,212,564 | $ | 148,583,132 | $ | 22,681,519 | $ | (1,936,800 | ) | (aa) (hh) | $ | 351,540,415 | ||||||||||
| Fuel surcharge and other reimbursements | 16,916,037 | 11,800,712 | 4,582,939 | 850,926 | (hh) | 34,150,614 | ||||||||||||||||
| Other revenue | 1,910,732 | - | - | 866,535 | (hh) | 2,777,267 | ||||||||||||||||
| Lease revenue | 2,050,121 | - | - | (41,048 | ) | (aa) | 2,009,073 | |||||||||||||||
| Total operating revenue | 203,089,454 | 160,383,844 | 27,264,458 | (260,387 | ) | 390,477,369 | ||||||||||||||||
| Cost of sales | - | 140,627,114 | - | (140,627,114 | ) | (hh) | - | |||||||||||||||
| Operating expenses | ||||||||||||||||||||||
| Salaries, wages and benefits | 42,970,439 | - | 5,721,814 | 50,227,693 | (hh) | 98,919,946 | ||||||||||||||||
| Stock-based compensation | 2,698,330 | - | - | - | 2,698,330 | |||||||||||||||||
| Fuel and fuel taxes | 15,813,808 | - | 2,664,918 | 16,707,595 | (hh) | 35,186,321 | ||||||||||||||||
| Purchased transportation | 97,598,053 | - | 12,318,647 | 59,290,485 | (aa) (hh) | 169,207,185 | ||||||||||||||||
| Truck expenses | 14,255,346 | - | 3,044,229 | 10,733,876 | (hh) | 28,033,451 | ||||||||||||||||
| Depreciation | 14,778,246 | - | 1,058,541 | 3,971,204 | (bb) (hh) | 19,807,991 | ||||||||||||||||
| Intangible amortization | 4,829,504 | - | - | 653,000 | (cc) | 5,482,504 | ||||||||||||||||
| Loss (gain) on sale of equipment | 41,047 | (1,675,405 | ) | - | - | (1,634,358 | ) | |||||||||||||||
| Goodwill and intangibles impairment | - | - | - | - | - | |||||||||||||||||
| Insurance premiums and claims | 11,378,951 | - | 1,022,179 | 9,038,483 | (hh) | 21,439,613 | ||||||||||||||||
| General, selling, and other operating expenses | 8,895,315 | 18,710,304 | 964,209 | (11,613,310 | ) | (aa) (hh) | 16,956,518 | |||||||||||||||
| Total operating expenses | 213,259,039 | 17,034,899 | 26,794,537 | 139,009,026 | 396,097,501 | |||||||||||||||||
| Operating (loss) income | (10,169,585 | ) | 2,721,831 | 469,921 | 1,357,701 | (5,620,132 | ) | |||||||||||||||
| Other income and (expense) | ||||||||||||||||||||||
| Interest expense | (2,829,067 | ) | (2,173,830 | ) | (347,877 | ) | (2,479,981 | ) | (aa) (dd) (ee) (hh) | (7,830,755 | ) | |||||||||||
| Acquisition costs | (23,736 | ) | - | - | - | (23,736 | ) | |||||||||||||||
| Adjustment of earn out contingency | - | - | - | - | - | |||||||||||||||||
| Restructuring costs | - | - | - | - | - | |||||||||||||||||
| Interest income | - | 215,008 | - | (88,165 | ) | (hh) | 126,843 | |||||||||||||||
| Other income, net | 14,738 | 1,607,209 | (521 | ) | (2,453,895 | ) | (aa) (hh) | (832,469 | ) | |||||||||||||
| Total other income (expense), net | (2,838,065 | ) | (351,613 | ) | (348,398 | ) | (5,022,041 | ) | (8,560,117 | ) | ||||||||||||
| (Loss) income before income taxes | (13,007,650 | ) | 2,370,218 | 121,523 | (3,664,340 | ) | (14,180,249 | ) | ||||||||||||||
| Income tax (benefit) expense | (2,622,101 | ) | 291,179 | 66,821 | (329,881 | ) | (gg) | (2,593,982 | ) | |||||||||||||
| Net (loss) income | (10,385,549 | ) | 2,079,039 | 54,702 | (3,334,459 | ) | (11,586,267 | ) | ||||||||||||||
| Less: Net income attributable to noncontrolling interest | - | 361,176 | - | (361,176 | ) | (hh) | - | |||||||||||||||
| Net (loss) income attributable to Proficient Auto Logistics, Inc. | (10,385,549 | ) | 1,717,863 | 54,702 | (2,973,283 | ) | (11,586,267 | ) | ||||||||||||||
| Other comprehensive (loss) income - foreign currency translation (MCL) | - | - | (137,244 | ) | 137,244 | (hh) | - | |||||||||||||||
| Comprehensive (loss) income | (10,385,549 | ) | 2,079,039 | (82,542 | ) | (3,197,215 | ) | (11,586,267 | ) | |||||||||||||
| Less: Comprehensive income attributable to noncontrolling interest | - | 361,176 | - | (361,176 | ) | (hh) | - | |||||||||||||||
| Comprehensive (loss) income attributable to Proficient Auto Logistics, Inc. | $ | (10,385,549 | ) | $ | 1,717,863 | $ | (82,542 | ) | $ | (2,836,039 | ) | $ | (11,586,267 | ) | ||||||||
| Net (loss) income per share - basic and diluted | $ | (0.37 | ) | $ | (0.41 | ) | ||||||||||||||||
| Weighted average shares - basic and diluted | 27,876,507 | 421,354 | (ii) | 28,297,861 | ||||||||||||||||||
See accompanying notes to the unaudited pro forma condensed combined financial information.
4
Notes to Unaudited Pro Forma Condensed Combined Financial Information
Note 1 - Description of the Transaction
On August 13, 2026 (the “Closing Date”), Proficient Auto Logistics, Inc. (“PAL” or the “Company”), through its wholly owned subsidiaries Proficient Services, Inc. (“US Buyer”) and H&A CN Acquisition, Ltd. (“Canada Buyer” and, together with US Buyer, the “Buyers”), completed the acquisition (the “Acquisition”) of all of the issued and outstanding equity interests of Hansen & Adkins Auto Transport, LLC (“H&A Auto Transport”), Hansen & Adkins Auto Logistics, LLC (“H&A Auto Logistics”), Royal Truck Leasing, LLC (“Royal”) and Hansen & Adkins Canada Ltd. (“H&A Canada”) pursuant to the Equity Purchase Agreement, dated as of August 10, 2026 (the “Purchase Agreement”), by and among the Buyers, Steven Hansen, Louie Adkins, Hansen & Adkins, Inc., Royal Holdco, LLC, The Steven Hansen Separate Property Trust and The Louie Adkins 2024 Trust (collectively, the “Sellers”), and Steven Hansen, in his capacity as seller representative (the “Seller Representative”).
H&A Auto Transport, H&A Auto Logistics and Royal are referred to collectively as “H&A.” Upon completion of the Acquisition, MCL McGill Carriers Ltd. (“MCL”) became a subsidiary of H&A Canada. For purposes of the unaudited pro forma condensed combined financial information, MCL’s historical financial information is presented under the caption “H&A Canada.” H&A and H&A Canada are referred to collectively as the “acquired businesses.” US Buyer acquired the H&A interests—H&A Auto Transport and H&A Auto Logistics having converted from California corporations to California limited liability companies before the Acquisition and Canada Buyer acquired the shares of H&A Canada. For U.S. federal income tax purposes, the purchase of the H&A interests is treated as a purchase of assets, with the acquired tax bases stepped up to allocated purchase price, while the purchase of H&A Canada is treated as a purchase of shares, with MCL’s historical tax bases carrying over.
The $130.0 million base purchase price under the Purchase Agreement was adjusted for a net working capital adjustment of $0.1 million, increased by estimated closing cash of $6.1 million and reduced by estimated closing indebtedness of $72.8 million and estimated transaction expenses of $1.9 million, resulting in an estimated equity purchase price of $62.8 million. For purchase-accounting purposes, preliminary consideration transferred was $62.8 million, consisting of $60.5 million of cash consideration and $2.2 million representing the fair value of 421,354 shares of PAL common stock measured at the acquisition date (which is the Closing Date). Because the Acquisition closed earlier on the Closing Date, the closing price of PAL common stock the day prior to the Closing Date was used. The difference between the estimated equity purchase price and preliminary consideration transferred primarily relates to the transaction expenses and the Seller-directed payoff paid by PAL on behalf of the Sellers, which reduced the estimated equity purchase price but are included in consideration transferred, and to the acquisition-date fair value measurement of the common stock issued as consideration. The components of consideration transferred and the preliminary purchase price allocation are presented in Note 3.
The estimated closing purchase price is subject to a customary post-closing true-up under the Purchase Agreement, based on a final closing statement (the “Final Closing Statement”) to be delivered within 90 days after the Closing Date, with any amount owed to the Buyers recoverable first from the $2.0 million adjustment escrow. In addition, the Sellers are entitled to additional contingent consideration (the “Earnout”) of up to $22.1 million if the acquired businesses’ 2026 earnings before interest, taxes, depreciation, and amortization (“EBITDA”) exceeds specified thresholds, of which up to $2.0 million is payable in shares of PAL common stock and the remainder in cash. No amount has been assigned to the Earnout in preliminary consideration transferred.
Contemporaneous with the closing of the Acquisition, PAL completed the issuance of $75.0 million aggregate principal amount of 5.500% Convertible Notes due 2033 (the “Convertible Notes”) and $82.0 million of borrowings under the M&T equipment financing agreement (the “M&T Credit Agreement”). In connection with the issuance of the Convertible Notes, PAL also entered into capped call transactions (the “Capped Calls” and, together with the issuance of the Convertible Notes and the M&T Credit Agreement borrowings, the “Financing Transactions”). The Convertible Notes bear interest at 5.500% per annum, payable semi-annually, and are convertible at an initial conversion rate of 153.7870 shares of PAL common stock per $1,000 principal amount (an initial conversion price of approximately $6.50 per share), with PAL electing to settle conversions in cash, shares or a combination. Concurrently with the issuance of the Convertible Notes, PAL paid $9.2 million for the Capped Calls intended to reduce potential dilution upon conversion of the Convertible Notes. The pro forma effects of the Financing Transactions on interest expense are described in Note 5.
The Acquisition has been accounted for as a business combination under the acquisition method of accounting in Accounting Standards Codification (“ASC”) Topic 805, Business Combinations, with PAL as the accounting acquirer. The Convertible Notes are accounted for as a single liability measured at amortized cost under ASC 470-20, and the Capped Calls are classified in stockholders’ equity under ASC 815-40.
5
Note 2 - Basis of Presentation
The unaudited pro forma condensed combined financial information has been prepared in accordance with Article 11 of Regulation S-X and reflects transaction accounting adjustments (“Transaction Accounting Adjustments”) as defined in Rule 11-02(a)(6)(i) of Regulation S-X, which depict the accounting for the Acquisition and the Financing Transactions required by accounting principles generally accepted in the United States (“U.S. GAAP”). Autonomous Entity Adjustments under Rule 11-02(a)(6)(hh) are not applicable because the Acquisition does not affect PAL’s status as an autonomous entity. Management’s Adjustments under Rule 11-02(a)(7) have not been presented; accordingly, the unaudited pro forma condensed combined financial information reflects only the Transaction Accounting Adjustments necessary to present the pro forma effect of the Acquisition.
The Acquisition was consummated on the Closing Date. The pro forma condensed combined balance sheet is presented as of June 30, 2026 and gives effect to the Acquisition and the Financing Transactions as if they had been consummated on that date. The pro forma condensed combined statements of operations for the year ended December 31, 2025 and the six months ended June 30, 2026 give effect to the Acquisition and the Financing Transactions as if they had been consummated on January 1, 2025. Transaction Accounting Adjustments that are nonrecurring are accordingly reflected only in the year ended December 31, 2025 and are not repeated in the interim period presented; see Note 6.
The preliminary allocation of consideration transferred in Note 3 is based on the consideration transferred and the estimated fair values of the assets acquired and liabilities assumed, based on balances as of June 30, 2026 that have not yet been updated to the Closing Date. The pro forma condensed combined balance sheet uses H&A’s and MCL’s historical balance sheets as of June 30, 2026 as the starting point. Consequently, goodwill in the pro forma condensed combined balance sheet equals the amount in the preliminary purchase price allocation in Note 3. Goodwill as finally determined is expected to differ by the change in H&A’s and MCL’s net assets between June 30, 2026 and the Closing Date, comprising their results of operations for that period, distributions to the Sellers (other than the pre-closing distribution of excluded assets reflected in adjustment (e)) and the difference between the acquired businesses’ indebtedness at June 30, 2026 and at the Closing Date. PAL will update the allocation in Note 3 for Closing Date balances, and the goodwill that PAL recognizes in its consolidated financial statements may differ materially from the amount presented in Note 3. The historical balance sheets of H&A as of June 30, 2026 include certain assets that were distributed to the Sellers or otherwise excluded from the Acquisition before the Closing Date. The Transaction Accounting Adjustments eliminate those assets from the pro forma condensed combined balance sheet, with the corresponding effect reflected in accumulated deficit as a pre-closing distribution to the Sellers, with no effect on goodwill, because the assets were not included in the net assets acquired.
H&A historical financial information: H&A’s historical financial information was derived from the consolidated financial statements of Hansen & Adkins, Inc. and Subsidiaries, which include H&A Auto Transport, H&A Auto Logistics and Royal, which Hansen & Adkins, Inc. consolidates as a variable interest entity of which it is the primary beneficiary, with the equity of Royal presented as a noncontrolling interest in H&A’s historical financial statements. Hansen & Adkins, Inc. was a Seller and was not acquired. Intercompany balances and transactions among H&A, including truck rent charged by Royal to H&A Auto Transport, are eliminated in H&A’s historical consolidated financial statements. Because PAL acquired all of the equity interests of Royal, the noncontrolling interest in H&A’s historical financial statements is eliminated in adjustment (k), and H&A’s historical net income is presented including the amounts attributable to the noncontrolling interest. Hansen & Adkins, Inc. elected to be taxed as an S corporation, and Royal is a limited liability company taxed as a partnership; accordingly, H&A’s historical income tax expense consists principally of state taxes. Following the Acquisition, Royal is a wholly owned subsidiary of PAL and is not expected to be a variable interest entity.
MCL historical financial information: MCL’s historical financial information was derived from the audited financial statements of MCL as of and for the year ended December 31, 2025 and the unaudited condensed financial statements as of and for the six months ended June 30, 2026, included as Exhibits 99.5 and 99.6 which are prepared in accordance with U.S. GAAP and presented in U.S. dollars.
Accounting policies and presentation: Management performed a preliminary review of H&A’s and MCL’s financial statement presentation and significant accounting policies. Certain reclassifications were made to conform H&A’s and MCL’s historical presentation to PAL’s, including the presentation of revenue, cost of sales, interest income, other income and certain balance sheet captions.
PAL is continuing its review of H&A’s and MCL’s accounting policies and presentation and may identify additional differences that, when conformed, could have a material effect on PAL’s consolidated financial statements.
Except as described in the adjustments below, the carrying amounts of H&A’s and MCL’s current assets and current liabilities are assumed to approximate their acquisition-date fair values due to their short-term nature. Accrued claims liabilities, including the noncurrent portion, are reflected at their historical carrying amounts, which are also assumed to approximate fair value.
6
Note 3 - Preliminary Consideration Transferred and Purchase Price Allocation
The following table summarizes the preliminary consideration transferred at the acquisition date and how each component was measured.
| Purchase Consideration | (amounts in million) | |||
| Cash paid to the Sellers at closing (1) | $ | 56.1 | ||
| Cash deposited in the adjustment escrow (2) | 2.0 | |||
| Cash paid to the Seller Representative expense fund (3) | 0.5 | |||
| Transaction expenses of the acquired businesses paid by PAL on behalf of the acquired businesses (4) | 1.9 | |||
| Net working capital adjustment | 0.1 | |||
| Fair value of 421,354 shares of PAL common stock issued at closing (5) | 2.2 | |||
| Estimated fair value of contingent consideration (Earnout) (6) | — | |||
| Total consideration transferred | $ | 62.8 | ||
Amounts may not sum due to rounding.
| (1) | Cash paid to Sellers at closing. |
| (2) | Held by the escrow agent to secure any post-closing purchase price adjustment in the Buyers’ favor and released to the Sellers to the extent not required. Release depends on facts and circumstances existing at the Closing Date; accordingly, the adjustment escrow is not contingent consideration. |
| (3) | Treated under Section 6.07(e) of the Purchase Agreement as consideration paid to the Sellers. |
| (4) | Transaction expenses deducted in determining the estimated closing purchase price included $0.94 million of legal, accounting and seller-related insurance costs, and $1.0 million of change in control payments to employees, including the employer portion of payroll taxes. PAL paid the legal, accounting and insurance costs and repaid the term loan at closing. The loan was not an obligation of the acquired businesses, and PAL’s payment on behalf of the Sellers is included in consideration transferred. The change in control payments were made through the acquired businesses’ payroll, were reimbursed by PAL at closing and are included in consideration transferred. A separate note receivable from the same Seller affiliate was distributed to the Sellers before closing and excluded from the acquired assets (see adjustment (e)). |
| (5) | Measured at PAL’s closing price of $5.33 per share on August 12, 2026. The number of shares was determined using a volume-weighted average price of $7.12 over the 20 trading days ending three days before the issuance date, as defined in the Purchase Agreement. No discount was applied for the lock-up restrictions on sale of the shares, because a contractual restriction on the sale of an equity security is not a characteristic of the security and therefore is not considered in measuring fair value. |
| (6) | See “Contingent consideration” below. |
Contingent consideration: The Purchase Agreement provides for contingent consideration of up to $22.1 million, based on the acquired businesses’ 2026 EBITDA, as defined. The Earnout is payable in cash, except that up to $2.0 million of the portion payable to one Seller is payable in a variable number of shares of PAL common stock and is classified as a liability. Based on the acquired businesses’ results through the acquisition date and projected results for the remainder of 2026, PAL estimated the preliminary acquisition-date fair value of the Earnout to be $0, and accordingly no Earnout liability has been reflected in the pro forma condensed combined balance sheet. This estimate is preliminary and may change as PAL completes its valuation.
To the extent subsequent changes in the fair value of the Earnout result from new information about facts and circumstances that existed at the acquisition date, the changes will be recognized as measurement-period adjustments to the provisional amounts, with a corresponding adjustment to goodwill. Changes resulting from events or circumstances arising after the acquisition date will be recognized in earnings in accordance with applicable U.S. GAAP. Accordingly, no impact has been reflected in the unaudited pro forma condensed combined statements of operations.
Amounts not included in consideration transferred: PAL’s acquisition-related costs, including the Buyers’ 50% share of the representations and warranties insurance cost of $0.2 million, financial advisory, legal, accounting and valuation fees and prepayment penalties of $0.5 million on indebtedness that PAL elected to repay (in addition to $0.5 million of prepayment penalties on loans in default that are included in the preliminary purchase price allocation; see adjustment (d)), are expensed as incurred and are not included in consideration transferred; see adjustments (c), (i) and (ff). Costs of issuing the Convertible Notes are recognized as a reduction of the carrying amount of the Convertible Notes; see adjustment (c).
7
Preliminary purchase price allocation: The preliminary allocation of the total consideration transferred to the assets acquired and liabilities assumed, measured at estimated acquisition-date fair value except where another measurement basis is required by ASC 805, is as follows:
| Category | Total (amounts in million) | |||
| Cash and cash equivalents | $ | 16.5 | ||
| Accounts receivable, net | 34.8 | |||
| Net investment in leases | 0.2 | |||
| Prepaid expenses and other current assets | 6.4 | |||
| Property and equipment, net and assets held for sale | 87.2 | |||
| Operating right-of-use assets | 0.9 | |||
| Finance lease right-of-use assets | 0.1 | |||
| Deposits | 1.6 | |||
| Identifiable intangible assets | 18.2 | |||
| Goodwill | 22.8 | |||
| Total assets acquired | 188.7 | |||
| Accounts payable | 10.5 | |||
| Accrued liabilities | 20.4 | |||
| Operating and finance lease liabilities | 1.0 | |||
| Notes payable | 74.6 | |||
| Deferred tax liability | 10.6 | |||
| Other long-term liabilities | 8.8 | |||
| Total liabilities acquired | 125.9 | |||
| Total consideration transferred | $ | 62.8 | ||
Amounts may not sum due to rounding.
Goodwill is attributable primarily to the assembled workforce of drivers and terminal personnel, the density and cross-border reach of the combined vehicle logistics network and expected synergies. Preliminary goodwill in the purchase price allocation agrees to goodwill in the unaudited pro forma condensed combined balance sheet. The pro forma adjustment reflects the estimated acquisition-date fair values and related transaction accounting adjustments based on information currently available.
The accounting for the Acquisition is incomplete. The consideration transferred remains subject to revision upon finalization of the Final Closing Statement under Section 2.06 of the Purchase Agreement, which is due within 90 days after the Closing Date, and of the acquisition-date fair value of the Earnout. Any resulting change will be recognized as a measurement-period adjustment. The significant assets acquired and liabilities assumed that are subject to revision during the measurement period include the fair values assigned to property and equipment, which are based on preliminary third-party desktop appraisals of the tractors and trailers and their remaining useful lives; identifiable intangible assets, which were identified and measured in a third-party valuation report that is subject to revision; the estimated useful lives of intangible assets; right-of-use assets and lease liabilities, claims liabilities and the related indemnification assets for matters indemnified by the Sellers, the long-term debt assumed, the resulting goodwill, and the acquisition-date uncertain income tax positions. To complete the accounting, PAL requires the final reports of its third-party valuation specialists, the Final Closing Statement and closing balance sheets, and the final acquisition-date income tax analysis. Differences between the preliminary and final amounts may be material.
Note 4 - Transaction Accounting Adjustments to the Pro Forma Condensed Combined Balance Sheet
The letters below correspond to the note references in the pro forma condensed combined balance sheet.
(a) Cash consideration and closing disbursements. Reflects cash disbursed by PAL on the Closing Date for consideration transferred - the closing cash payment, the adjustment escrow, the Seller Representative expense fund, the acquired businesses’ transaction expenses paid on their behalf (including change in control payments) and the net working capital adjustment, as described in Note 3. The adjustment decreases cash and cash equivalents by $60.5 million, consisting of $56.1 million cash paid to the Sellers at closing, $2.0 million deposited in the adjustment escrow, $0.5 million paid to the expense fund and $1.9 million of the acquired businesses’ transaction expenses. Repayment of the acquired businesses’ indebtedness is reflected in adjustment (d).
8
(b) Closing stock consideration. Reflects the issuance of 421,354 shares of PAL common stock, par value $0.01 per share, at their acquisition-date fair value of $2.2 million (based on PAL’s closing price of $5.33 per share on August 12, 2026). The adjustment increases common stock by $4,214 and additional paid-in capital by $2.2 million. The number of shares issued was determined based on a contractual value of $3.0 million using the calculated share price as defined in the Purchase Agreement; accordingly, the contractual value used to determine the share count differs from the acquisition-date fair value of the shares.
(c) Financing Transactions. Reflects (i) the issuance of $75.0 million aggregate principal amount of the Convertible Notes, net of estimated issuance costs, recorded as convertible notes payable of $72.4 million; (hh) borrowings of $82.0 million under the M&T Credit Agreement, net of debt issuance costs, recorded as long-term debt of $80.57 million ($17.60 million current and $62.97 million noncurrent); (iii) the payment of $9.2 million for the Capped Calls, which are indexed to PAL’s common stock and classified in stockholders’ equity under ASC 815-40, recorded as a reduction of additional paid-in capital; and (iv) the payment of $0.5 million of prepayment penalties on H&A’s indebtedness that PAL elected to bear, which are expensed as incurred and recorded as an increase in accumulated deficit. The net cash effect of the Financing Transactions is reflected in cash and cash equivalents.
(d) Settlement and refinancing of indebtedness. Reflects the elimination of H&A notes payable and term loans of $14.6 million (current portion) and $51.8 million (noncurrent portion) as of June 30, 2026, which PAL repaid at closing (approximately $65.2 million of principal and accrued interest) and did not assume. Prepayment penalties of $0.5 million associated with loans in default were treated as additional consideration and are reflected in goodwill; prepayment penalties that PAL elected to bear are reflected separately in adjustment (c). The adjustment decreases cash and cash equivalents by $66.4 million, increases accumulated deficit by $0.6 million and decreases goodwill by $0.6 million, which represents the net effect of the default-related prepayment penalties, the write-off of $0.1 million of unamortized debt issuance costs and the difference between the June 30, 2026 carrying amount of the debt and the amount paid at closing. In addition, PAL repaid $15.9 million of its existing debt with proceeds of the M&T Credit Agreement borrowings, eliminating carrying amounts of $4.6 million (current portion) and $11.3 million (noncurrent portion) as of June 30, 2026, and recognized a loss on extinguishment of $0.1 million in accumulated deficit, representing the amount repaid in excess of the carrying amount, including the write-off of unamortized debt issuance costs. The loss on extinguishment in the pro forma balance sheet is measured using carrying amounts as of June 30, 2026. The loss in the pro forma statement of operations for the year ended December 31, 2025 (adjustment (ff)) of $0.4 million consists of $0.40 million of prepayment penalties on the refinanced debt and $0.03 million of unamortized debt issuance costs measured as of January 1, 2025.
(e) Excluded assets and liabilities, pre-closing distributions and receivables from Sellers. Under Section 6.09 of the Purchase Agreement, approximately $6.1 million of H&A assets were distributed to the Sellers or otherwise excluded before closing, including $0.45 million of property and equipment, $0.63 million due from stockholders, and $5.06 million of notes receivable. Adjustments (e) and (l) remove these assets from the pro forma balance sheet, with the corresponding reduction recorded in accumulated deficit as a pre-closing distribution to the Sellers and no effect on goodwill.
(f) Elimination of related-party balances. Reflects the elimination of balances related to arrangements with owners and affiliates of the Sellers, including net investment in leases, finance lease right-of-use assets, finance lease liabilities and long-term debt, that were terminated or settled at the closing. The adjustment decreases net investment in leases by $0.4 million, finance lease right-of-use assets by $0.1 million, finance lease liabilities by $0.1 million and long-term debt by $0.4 million as of June 30, 2026.
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(g) Property and equipment. Reflects the adjustment of acquired property and equipment, principally tractors and trailers, to estimated acquisition-date fair value based on preliminary third-party appraisals of the Royal and MCL fleets. The adjustment increases property and equipment, net by $18.1 million and recognizes $1.1 million of acquired equipment held for sale, which is presented in assets held for sale and is excluded from the basis for the depreciation adjustment in Note 5(bb).
Amount (amounts in million) | ||||
| Appraised fair value of acquired trucks and trailers | $ | 85.4 | ||
| Less: historical carrying amount | (67.3 | ) | ||
| Fair value adjustment | $ | 18.1 | ||
Amounts may not sum due to rounding.
(h) Identifiable intangible assets. Reflects recognition at estimated acquisition-date fair value of identifiable intangible assets acquired, consisting of customer relationships and trade names. The adjustment increases intangible assets, net by $18.2 million and is the basis for the amortization adjustment in Note 5(cc).
| Intangible asset | Estimated (amounts in million) | Estimated useful life (years) | |||||
| Customer relationships | $ | 12.6 | 15 | ||||
| Trade names | 5.6 | 12 | |||||
| Total | $ | 18.2 | |||||
(i) Acquisition-related transaction costs. Reflects acquisition-related transaction costs incurred, or expected to be incurred, by PAL after June 30, 2026, including financial advisory, legal, accounting and valuation fees and PAL’s $0.2 million share of the representations and warranties insurance cost. These costs are expensed as incurred, are not a component of consideration transferred and are nonrecurring (see Note 5(ff) and Note 6). The adjustment decreases cash and cash equivalents and increases accumulated deficit by $3.9 million. Prepayment penalties of $0.5 million on H&A’s indebtedness that PAL elected to bear are reflected in adjustment (c).
(j) Deferred income taxes. Reflects the deferred income tax effects of the preliminary purchase accounting. Deferred income taxes are measured at PAL’s estimated blended U.S. federal and state rate of 24.49%, which is applied to the net taxable temporary difference of $37.4 million arising from identifiable intangible assets of $18.2 million plus the $19.2 million increase in property and equipment, net and assets held for sale (adjustments (g) and (h)). The net adjustment increases deferred tax liability, net by $9.2 million, with a corresponding increase in goodwill. The deferred tax amounts are preliminary and subject to completion of PAL’s acquisition-date income tax analysis.
(k) Elimination of historical equity and noncontrolling interest. Reflects the elimination of the acquired businesses’ historical common stock of $0.1 million, additional paid-in capital of $20.9 million, accumulated other comprehensive loss of $0.2 million, noncontrolling interest of $18.9 million and the related accumulated deficit of $28.6 million, after giving effect to adjustment (e). H&A’s historical financial statements consolidate Royal as a variable interest entity and present the interests in Royal held by parties other than H&A as noncontrolling interest. Because PAL acquired 100% of Royal in the Acquisition, the noncontrolling interest is eliminated and no noncontrolling interest is reflected in the pro forma condensed combined balance sheet.
(l) Reclassifications. Reflects conforming reclassifications to align the historical financial statement captions of the acquired businesses with PAL’s presentation, including the reclassification of certain receivables, notes receivable, net investment in leases, prepaid and other current assets, deposits, accounts payable, accrued liabilities, long-term debt and other long-term liabilities. These reclassifications have no effect on total stockholders’ equity or net income (loss). Total assets and total liabilities each increase by $0.1 million, reflecting the presentation of $0.08 million of unamortized debt issuance costs.
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Note 5 - Transaction Accounting Adjustments to the Pro Forma Condensed Combined Statements of Operations
The letters below correspond to the note references in the pro forma condensed combined statements of operations. Except as described in Note 6, each adjustment is reflected in both periods presented.
(aa) Intercompany and related-party activity. Reflects the elimination of transactions between H&A and MCL (including shared services charges, vehicle transport, Royal truck leases and interest on notes between Royal and MCL), which are intercompany transactions of the combined company for purposes of the pro forma condensed combined statements of operations, and the elimination of income and expenses related to arrangements with the Sellers and their affiliates (including a shared services fee) that were terminated at closing under Section 2.04(a)(viii) of the Purchase Agreement.
(bb) Depreciation expense. Reflects the adjustment to depreciation expense arising from the fair value adjustment of acquired property and equipment (adjustment (g)) and the application of estimated remaining useful lives at the acquisition date, computed on a straight-line basis as follows. Depreciation for each period presented is calculated using the fair values measured at the acquisition date; those fair values have not been remeasured as if the Acquisition had occurred at the beginning of the earliest period presented.
Adjustment (bb) records depreciation on acquired trucks and trailers using an aggregate acquisition-date fair value of $85.4 million of which $1.1 million is classified as held for sale. The adjustment removes historical depreciation attributable to trucks and trailers and records pro forma depreciation as though the Acquisition occurred on January 1, 2025. Management limited the analysis to trucks and trailers because this category represents the significant majority of the acquired businesses’ property and equipment. The fair value basis uses fair value from an outside appraisal.
Estimated (amounts in million) | Estimated remaining useful life (years) | Depreciation (amounts in million) | Depreciation (amounts in million) | |||||||||||
| Trucks and trailers | $ | 84.3 | 1 – 8 years | $ | 10.85 | $ | 4.9 | |||||||
| Less: H&A and MCL historical depreciation | (12.00 | ) | (6.8 | ) | ||||||||||
| Total transaction accounting adjustment | $ | (1.15 | ) | $ | (1.9 | ) | ||||||||
Amounts may not sum due to rounding.
The fair values above are preliminary and were estimated using the market approach for tractors and trailers, based on third-party desktop appraisals that relied on comparable sales of similar equipment. Remaining useful lives and salvage values of the acquired tractors and trailers were estimated by PAL based on its depreciation policies for similar equipment, considering the age of each unit. The adjustment decreases depreciation expense by $1.15 million for the year ended December 31, 2025 and $1.9 million for the six months ended June 30, 2026.
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(cc) Amortization of acquired identifiable intangible assets. Reflects amortization of the identifiable intangible assets recognized at estimated acquisition-date fair value (adjustment (h)), computed on a straight-line basis over the estimated useful lives set out below. Neither H&A nor MCL recognized intangible amortization in the periods presented.
Estimated (amounts in million) | Estimated useful life (years) | Amortization (amounts in million) | Amortization (amounts in million) | ||||||||||||
| Customer relationships | $ | 12.6 | 15 | $ | 0.8 | $ | 0.42 | ||||||||
| Trade names | 5.6 | 12 | 0.5 | 0.23 | |||||||||||
| Total / transaction accounting adjustment | $ | 18.2 | $ | 1.3 | $ | 0.65 | |||||||||
The fair values above are preliminary and were estimated using the income approach, principally the multi-period excess earnings method for customer relationships and the relief-from-royalty method for trade names.
(dd)/(ee) Interest expense. Reflects (dd) the elimination of interest expense and amortization of debt issuance costs on H&A’s indebtedness repaid at closing (adjustment (d)), as if it had been repaid on January 1, 2025, and (ee) interest expense and amortization of debt issuance costs on the Convertible Notes and the M&T Credit Agreement borrowings (adjustment (c)), as if issued and borrowed on January 1, 2025. Interest on MCL’s indebtedness, which was not repaid, is not adjusted. Interest on the Convertible Notes is based on the 5.500% fixed coupon. Interest on the M&T Credit Agreement borrowings is based on a 6.79% fixed rate.
Year ended (amounts in million) | Six months ended (amounts in million) | |||||||
| (dd) Elimination of H&A historical interest expense | $ | (3.5 | ) | $ | (2.1 | ) | ||
| (dd) Elimination of PAL historical interest on debt refinanced by the M&T Credit Agreement | (1.2 | ) | (0.6 | ) | ||||
| (ee) Interest on the Convertible Notes at 5.500% | 4.1 | 2.1 | ||||||
| (ee) Amortization of debt issuance costs on the Convertible Notes and the M&T Credit Agreement borrowings | 0.8 | 0.4 | ||||||
| (ee) Interest on M&T Credit Agreement borrowings | 5.6 | 2.8 | ||||||
| Net increase (decrease) in interest expense | $ | 5.9 | $ | 2.6 | ||||
Amounts may not sum due to rounding.
(ff) Acquisition-related transaction costs. Reflects nonrecurring acquisition-related and buyer transaction costs that increase acquisition costs by $4.4 million, comprising $3.9 million of financial advisory, legal, accounting and valuation fees and PAL’s share of representations and warranties insurance costs incurred, or expected to be incurred, after June 30, 2026, and $0.5 million of prepayment penalties described in adjustment (c). The adjustment also decreases other income, net by $0.4 million for prepayment penalties and the write-off of unamortized debt issuance costs associated with PAL’s debt refinancing described in adjustment (d). Assuming the Acquisition occurred on January 1, 2025, these adjustments are reflected only in the year ended December 31, 2025, with no corresponding interim-period adjustment; costs recognized in PAL’s historical statements of operations have not been removed or reclassified. These costs are not expected to recur beyond 12 months after the Acquisition; see Note 6.
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(gg) Income taxes. Reflects the income tax effect of the pre-tax pro forma adjustments. Before the Acquisition, H&A Auto Transport and H&A Auto Logistics were subsidiaries of an S corporation and Royal was a limited liability company taxed as a partnership, and none was subject to U.S. federal income tax at the entity level. H&A’s historical income tax benefit of $0.3 million for the year ended December 31, 2025 and income tax expense of $0.3 million for the six months ended June 30, 2026 reflect principally state entity-level taxes. H&A’s historical pre-tax income includes Royal’s income attributed to the noncontrolling interest in H&A’s historical financial statements ($1.0 million for the year ended December 31, 2025 and $0.4 million for the six months ended June 30, 2026), which is attributable to PAL following its acquisition of 100% of Royal and is therefore included in pro forma net income attributable to PAL. The income tax effect of the pre-tax pro forma adjustments is computed at an estimated blended U.S. federal and state statutory income tax rate of 24.49%. No income tax benefit has been reflected for acquisition-related transaction costs that are not deductible. The Acquisition is not expected to change PAL’s valuation allowance, and no nonrecurring income tax benefit has been reflected. The effective tax rate of the combined company could differ materially from the rates reflected herein. The adjustment decreases income tax expense by $1.7 million for the year ended December 31, 2025 and $0.3 million for the six months ended June 30, 2026.
(hh) Reclassifications and elimination of noncontrolling interest. Reflects conforming reclassifications to align the historical statement of operations captions of H&A with PAL’s presentation. H&A’s audited revenue for the year ended December 31, 2025 is presented as a single total operating revenue amount in H&A’s historical financial statements; accordingly, the H&A column of the year ended December 31, 2025 statement of operations presents no amounts on the individual revenue captions, and the transaction accounting adjustments column maps that total to the revenue captions above. H&A’s historical cost of sales of $298.6 million for the year ended December 31, 2025 and $140.6 million for the six months ended June 30, 2026 is reclassified to the corresponding operating expense captions. H&A’s historical total operating revenue is reclassified to revenue, before fuel surcharge, fuel surcharge and other reimbursements, and other revenue, and H&A’s historical interest income of $0.5 million and $0.2 million, respectively, is reclassified to other income, net. This adjustment also eliminates the net income and comprehensive income attributable to noncontrolling interest in each period presented because PAL acquired 100% of Royal in the Acquisition. This adjustment also eliminates MCL’s historical other comprehensive income (loss) from foreign currency translation for the year ended December 31, 2025 and the six months ended June 30, 2026 recognized in the acquired businesses’ historical financial statements. These reclassifications have no effect on pro forma net income (loss), and no noncontrolling interest is reflected in the pro forma condensed combined statements of operations.
(ii) Earnings (loss) per share. Pro forma basic weighted average shares outstanding for each period presented have been adjusted to reflect the 421,354 shares of PAL common stock issued at the closing as if they had been outstanding since January 1, 2025. Pro forma basic and diluted loss per share are computed by dividing pro forma net loss by those weighted average shares. Diluted loss per share equals basic loss per share, because a pro forma net loss is reported for each period presented and the effect of potential common shares is antidilutive. Potential common shares issuable upon conversion of the Convertible Notes under the if-converted method were excluded because their effect would be antidilutive, as were any shares that would be issuable in settlement of the stock portion of the Earnout, for which the conditions for issuance have not been met. The Capped Calls are excluded from the computation of diluted loss per share because their effect is always antidilutive.
Note 6 - Nonrecurring Items
The following Transaction Accounting Adjustments are nonrecurring and are reflected only in the pro forma condensed combined statement of operations for the year ended December 31, 2025: (i) acquisition-related transaction costs of $4.4 million (adjustments (c), (i) and (ff)), including $0.5 million of prepayment penalties on H&A indebtedness that PAL elected to repay; (hh) a $0.4 million loss on extinguishment of PAL debt refinanced with the M&T Credit Agreement borrowings (adjustment (ff)). The income tax effect of these items is $0.2 million. No income tax benefit has been reflected on the $3.9 million of buyer transaction costs included in item (i). None of these items is expected to recur in PAL’s results beyond twelve months after the Acquisition.
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