TOPP 10-K & 10-Q changes, risk factors and insider trading

Several of the above factors were evident during the COVID-19 pandemic in the freight environment, which led to labor shortage,shortages, inflationary pricing, and severe disruption to the global supply chain. Similar conditions in the future could have a material adverse effect on our business, financial condition and results of of operations.

On October 1, 2024, dockworkers across ports from from Maine to Texas on the East and Gulf Coasts initiated a strike, citing concerns over wages and the need for protections against increased automation. This strike was temporarily resolved on October 3, 2024, after the union and U.S. Maritime Alliance reached a tentative deal on wages and agreed to extend the existing master contract until January 15, 2025 to allow for further negotiations on unresolved issues. On January 8, 2025, the parties reached a tentative agreement for a six-year contract. However, should negotiations fail and the strike resume, it could pose a major disruption to the flow of goods, materially restricting both imports and exports through these key Eastern and Gulf ports, particularly if the strike extends for weeks or even longer. Such an extended disruption to supply chains, if happens, could have significant ripple effects on the U.S. economy, and our operations could be materially adversely affected if our customers suspend exporting waste paper, scrap metal and other commodities we transport to ports for an extended period. At this stage, we cannot be certain whether the strike will resume, how long it might last, or the extent of the impact it may have on our business.

A substantial portion of our business and revenue derive from our brokerage model, where we support owner-operators to grow their fleets within our umbrella. Such a business model and the use of owner-operators expose us to different risks that a traditional fleet ownership and management business may not experience.

We are in the process of developing a scalable brokerage model, specializing in converting drivers into owner-operators by means of training and capturedcapturing market share. These owner-operators are encouraged and supported by us in order to grow their fleets within our umbrella. We assist with staffing their vehicles and ensuring DOT compliance for all members of our team. For more information on our relationship with owner-operators and our contractual rights to to the use of trucks in our fleet, see also “Item 1. Business—Employees and Human Capital—Owner-Operators,” and “Item 1. Business—Equipment We Use.”

On January 12, 2024, two drivers, Rainey Mejia Rodriguez and Frank Santana Rodriguez (the “plaintiffs”), filed a class action lawsuit against the Company’s subsidiary, Toppoint Inc, and certain other parties, including Hok C. Chan, in the Superior Court of New Jersey, Essex County, alleging misclassification of truck drivers as independent contractors rather than employees. The plaintiffs seek to represent a class of similarly situated individuals who provided services in New Jersey from January 2018 through the date of the complaint. The complaint asserts violations of the New Jersey Wage Payment Law and the New Jersey Wage and Hour Law, including claims of unlawful wage deductions and failure to pay overtime. The plaintiffs sought compensatory damages, treble and/or liquidated damages, attorneys’ fees, and injunctive relief, without specifying a dollar amount of damages. On July 27, 2024, August 26, 2024, and November 22, 2024, the Court issued multiple orders dismissing the case for lack of prosecution. Upon a motion to reinstate the case filed on January 15, 2025 by the plaintiffs, the Court reinstated the case on January 31, 2025. WeOn May 1, 2025, Toppoint Inc filed a motion to dismiss the amended complaint, and a motion hearing was held on July 3, 2025. On June 6, 2025, the court dismissed the case without prejudice against Mr. Hok C. Chan for lack of prosecution. Although we believe the claims are without merit and intend to continue to vigorously defend against them.them, we cannot predict the outcome of this matter or similar claims. An adverse outcome in this litigation or in any future misclassification challenge could materially and adversely affect our business, financial condition and results of operations.

In recent years, various factors such as the geopolitical geopolitical instability in Ukraine and Gaza and the COVID-19 pandemic caused great financial instability in the global economy, which resulted in, among othersother things, the diesel fuel price to surge to record high in the United States. CostThe cost of diesel fuel represents a significant expense for our owner-operators which we draw on to provide trucking services and solutions to our clients. Diesel fuel prices fluctuate greatly due to factors beyond our control, such as political events, terrorist activities, armed conflicts, depreciation of the dollar against other currencies and weather, such as hurricanes, and other natural or man-made disasters, each of which may lead to an increase in the cost of fuel. Fuel prices also are affected by the rising demand in developing countries, and could be adversely impacted by diminished drilling activity and by the use of crude oil and oil reserves for other purposes. Such events may lead not only to increases in fuel prices, but also to fuel shortages and disruptions in the fuel supply chain. Because our operations are dependent upon diesel fuel, significant diesel fuel cost increases, shortages or supply disruptions could materially and adversely affect our operating results and financial condition.

A significant portion of our revenue is generated from a small number of major customers, the loss of, or significant reduction of business with, one or more of which could have a material adverse effect on our business. For the fiscal years ended December 31, 20242025 and 2023,2024, our top ten customers, based on revenue, accounted for approximately 48%59% and 49%58% of our total revenue, respectively. AThe substantialmajority portion of our freight is from customers in the waste paper products industry. Others include scrap metal export and general freight import clients. As such, our volumes are largely dependent on a well-functioning supply chainchain, export demand and exportinbound demand.ship volume. In the event of a reduction in or termination of our services by one or more of our major customers, we could be required to replace the volumes elsewhere at uncertain rates and volumes, suffer reduced equipment utilization or lose our owner-operators. Failure to retain our existing customers, or enter into relationships with new customers, each on acceptable terms, could materially impact our business, financial condition, results of operations and ability to meet our current and long-term financial forecasts.

Economic conditions and capital markets may materially adversely affect our customers and their ability to remain solvent. Our customers’ financial difficulties can negatively impact our results of operations and financial condition, especially if they were to delay or default on payments to us. As of December 31, 2025, we had accounts receivable, net of $1.40 million, and we maintain an allowance for expected credit losses based on management’s assessment of collectability. Generally, we do not have contractual relationships that guarantee any minimum volumes with our customers, and we cannot assure you that our customer relationships will continue as presently in effect. There is no assurance any of our customers will continue to utilize our services, renew our existing contracts, if any, or continue at the same volume levels.

We have engaged in, and may continue to inengage in, transactions with related parties, and such transactions present possible conflicts of interest that could have an adverse effect on our business and results of operations.

We have entered intointo, and may continue to enter certaininto, transactions with Mr.our Hokdirectors, Cexecutive Chan,officers, principal stockholders and their affiliates or family members. These transactions have included, among other things, office leases with related parties, payments to a family member of our Chief Executive Officer andfor dispatch-related Chairmanservices, ofequipment-related thearrangements Board,with Mr.such Johnrelated Feliciano III, our Chief Financial Officerparty, and arelated-party director, or their affiliates.financing. For detailed information, see “Item 13. Certain Relationships and Related Transactions, and Director Independence.” WeAlthough we believe the terms obtained or consideration that we paid or received, as applicable, in connection with these transactions were comparable to terms available or the amounts that would be paid or received, as applicable, in arm’s-length transactions, we cannot assure you that transactions.this is the case, or that future related-party transactions will be on terms as favorable to us as those that we could obtain from unaffiliated third parties.

The Company has incurred indebtedness and may incur other debt in the future, which maycould adversely affect its financial condition and future financial results.

The Company borrows funds from commercial banksbanks, financial institutions and affiliates from time to time to support its working capital needs and other general corporate purposes. As of December 31, 2025, we had outstanding loans payable consisting of, among other things, a truck loan, an Economic Injury Disaster Loan and a term loan with M&T Bank. Existing debt, and any debt that we may incur in the future, may adversely affect our financial condition and future financial results by, among other things:

We are highly dependent upon the services of certain certain key employees, including our executive officers. The loss of any of their services could negatively impact our operations and future profitability. Inadequate succession planning or the unexpected departure of key executive officers could cause substantial disruption to our business operations, deplete our institutional knowledge base and erode our competitive advantage. Additionally, we must continue to recruit, develop and retain skilled and experienced personnel if we are to realize our goal of expanding our operations and continuing our growth, including internationally. Failure to recruit, develop and retain a core group of operational personnel could have a materially adverse effect on our business.

Historically, acquisitions have not been a significant part of our growth strategy. From inception to date, we didhave not completecompleted any significant acquisitions. We may not be successful in identifying, identifying, negotiating or consummating any future acquisitions. If we decide to acquire other companies to stay competitive, we may not successfully integrate these businesses or achieve the synergies and operating results anticipated in connection with these acquisitions. The continuing trend toward consolidation in the trucking industry may result in the acquisitions of smaller carriers by large carriers that gain market share and other competitive advantages through such acquisitions. If we fail to make or successfully execute future acquisitions, our growth rate could be materially and adversely affected.

If we fail to implement and maintain an effective system of internal controls to remediate our significantmaterial deficienciesweaknesses in financial reporting, our ability to report our results of operations and financial condition could be adversely affected.

Prior to the initial public offering completed in January 2025, we were a private company with limited accounting personnel and other resources with which to address our internal control over financial reporting. In connection with the audit of our consolidated financial statements included in this report, we and our independent registered public accounting firm identified significantmaterial deficienciesweaknesses in our internal control over financial reporting. As a result, our internal control over financial reporting was not effective as of December 31, 2025.

The significantmaterial deficienciesweaknesses that have been identified relate to our(i) lackwe ofdo robustnot andhave formalinternal financialaudit reporting policies and proceduresfunction in place to addressmonitor SECthe disclosurecontrol requirements.execution Neitherwhich may lead a material audit adjustments weto northe ourfinancial statements; (ii) lack of assessment and implementation of internal control over financial reporting in accordance with the requirement of COSO 2013 framework. Our independent registered public accounting firm undertookdidn’t undertake a comprehensive assessment of our internal control for purposes of identifying and reporting material weaknesses and other deficiencies in our internal control over financial reporting. Had we performed a formal assessment of our internal control over financial reporting or had our independent registered public accounting firm performed an audit of our internal control over financial reporting, additional deficiencies may have been identified.

We have engaged external financial consultant with U.S. GAAP experience to help our management in financial reporting processes and are in the process of developing and implementing a comprehensive set of processes and internal controls to timely and appropriately (i) identify transactions that may be subject to complex U.S. GAAP accounting treatment, (ii) analyze the transactions in accordance with the relevant U.S. GAAP, and (iii) review the accounting technical analysis. However, the implementation of these measures may not fully address the significantmaterial deficienciesweaknesses in our internal control over financial reporting. Our failure to correct the significantmaterial deficienciesweaknesses or our failure to discover and address any other deficiencies could result in inaccuracies in our financial statements and impair our ability to comply with applicable financial reporting requirements and related regulatory filings on a timely basis. Moreover, ineffective internal control over financial reporting could significantly hinder our ability to prevent fraud.

We are subject to regulation at the federal level and at the state level. We may incur additional expenses associated with state wage, driver meal and rest break regulation.regulations. In addition, we operate in the United States pursuant to federal operating authority granted by the DOT. Our owner-operators and other independent contractor drivers also must comply with the safety and fitness regulations of the DOT, implemented through the FMCSA, including those relating to CSA safety performance and measurements, drug and alcohol testing and Hours of Service. Weight and equipment dimensions also are subject to government regulations. We also may become subject to new or more restrictive regulations relating to exhaust emissions, drivers’ Hours of Service, ergonomics, collective bargaining, security at ports and other matters affecting safety or operating methods. We, as well as our owner-operators and other independent contractor drivers, must comply with enacted governmental regulations regarding safety, equipment, environmental protection and operating methods. Examples include regulation of equipment weight, equipment dimensions, fuel emissions, driver Hours of Service, driver eligibility requirements, on-board reporting of operations and ergonomics. We may also become subject to new or more restrictive regulations related to safety or operating methods, which could adversely affect our owner-operators’ fleets and operations in those jurisdictions.

The Tax Act as modified by the CARES Act is unclear in many respects and could be subject to potential amendments and technical corrections, as well as interpretations and implementing regulations by the Treasury Department and IRS, any of which could lessen or increase certain adverse impacts of the legislation. In In addition, it is unclear how these U.S. federal income tax changes will affect state and local taxation, which often uses federal taxable income as a starting point for computing state and local tax liabilities. Our analysis and interpretation of this legislation is preliminary and ongoing and there may be material adverse effects resulting from the legislation that we have not yet identified. While some of the changes made by the tax legislation may adversely affect us, other changes may be beneficial. We continue to work with our tax advisors and auditors to determine the full impact that the recent tax legislation will have on us. We urge our investors to consult with their legal and tax advisors with respect to such legislation and its potential effect on an investment in our common stock.

We may not be able to maintain a listing of our common stock on the NYSE American.

Once our common stock is listed on the NYSE American, we must meet certain financial and liquidity criteria to maintain such listing. If we violate NYSE American’s listing requirements, or if we fail to meet any of NYSE American’s listing standards, our common stock may be delisted. In addition, our board of directors may determine that the cost of maintaining our listing on a national securities exchange outweighs the benefits of such listing. A delisting of our common stock from NYSE American may materially impair our shareholders’ ability to buy and sell our common stock and could have an adverse effect on the market price of, and the efficiency of the trading market for, our common stock. The delisting of our common stock could significantly impair our ability to raise capital and the value of your investment.

We have broad discretion over the use of the net net proceeds from this initial public offering, and our actual expenditures may differ significantly from our current plans. While we intend intend to allocate these funds for geographic expansion, investments in physical and IT infrastructure, sales and marketing efforts, general general working capital, and other corporate purposes, various factors may influence how we ultimately deploy these resources. For example, we have loaned a substantial portion of the proceeds from the initial public offering ($6 million) to a third-party borrower as a temporary debt investment. See “Item 1A Risk Factors - Operational and Industry Risks - A substantial portion of our capital was loaned to a third-party borrower, and if that borrower delays repayment or defaults, our liquidity, financial condition and results of operations could be materially adversely affected.” Shareholders will not have the ability to evaluate or influence these decisions and must rely on our management’s judgment. There is a risk that the proceeds may be used in ways that do not align with shareholder expectations, do not enhance profitability, or do not increase our share price. Additionally, we may invest or allocate these funds in ways that do not generate income or that may result in losses.

Any trading market for our common stock may be influenced in part by any research reports that securities industry analysts publish about us. We may never obtain research coverage by by securities industry analysts. If no securities industry analysts commence coverage of us, the market price and market trading volume of of our securities could be negatively affected. In the event we are covered by analysts, and one or more of such analysts downgrade our securities, securities, or otherwise reportsreport on us unfavorably, or discontinuesdiscontinue coverage of us, the market price and market trading volume of our securities could could be negatively affected.

Future issuances of our common stock or securities convertible into, or exercisable or exchangeable for, our common stock, or the expiration of lock-up agreements that restrict the issuance of new common stock or the trading of outstanding common stock, could cause the market price of our common stock to decline. We cannot predict the effect, if any, of future issuances of our securities, or the future expirations of lock-up agreements, on the price of our securities. In all events, future issuances of our securities would result in the dilution of your holdings. In addition, the perception that new issuances of our securities could occur, or the perception that locked-up parties will sell their securities when the lock-ups expire, could adversely affect the market price of our securities. In connection with our initial public offering, we have entered into a lock-up agreement that prevents us, subject to certain exceptions, from offering additional shares of capital stock for up to six (6) months after the closing of the offering. InThat additionlock-up period has expired as of the date of this annual report. As a result, we may be able to anyoffer adverseadditional effectsshares, thatand mayour arise upon the expiration of these lock-up agreements, the lock-up provisions in these agreementssecurityholders may be waived,able atto anysell timeshares, andin withouteach notice. If the restrictions under the lock-up agreements are waived, our securities may become available for resale earlier,case subject to applicable law, including without notice, which could increase reduce the supply of shares available in the market and adversely affect the market price forof our common stock.

We are a truckload services and solutions provider focused on the recycling export supply chain. We have become a key player in the New Jersey and Pennsylvania regional trucking market for waste paper, evidenced by our significant market share where we accounted for approximately 34% of the waste paper export drayage volumes through New Jersey’s ports and approximately 30% through Philadelphia’s ports, according to data sourced from IHS Markit.paper. In addition to waste paper, our portfolio also includes the shipment of scrap metal and wooden logs from large waste companies, recycling centers and commodity traders to the ports of Newark, NJ, and Philadelphia, PA. We also provide import transportation services at the ports of Newark and Philadelphia, under which we transport cargo-filled containers from the ports to our customers’ designated delivery locations. We continue to expand our footprints domestically and internationally and have ventured into the recycling export transport marketmarkets of in Tampa, JacksonvilleJacksonville, and Miami, FL, and Baltimore, MD MD, in 2023, and Ensenada, Mexico in 2024.2024, and Houston, Texas in 2025. We intend to explore the international market in Canada,Latin theAmerica, Unitedincluding KingdomChancay, and AustraliaPeru, in the near future.

Our client base includes some of the largest Fortune 500 waste companies and over 280207 recycling centers and commodity traders that operate in nearly 2,3001,077 locations. Our growing client base relies on us as their partner to provide a “white glove service” to ensure their time-sensitive, ultra-high throughput commodities commodities are safely loaded and delivered right to container ships. In addition, capitalizing on our know-how in developing logistics solutions solutions over the years, we are able to propose integrated transportation solutions that cover loading, transport, port drayage and unloading.

Our revenuesrevenue from the “Others” vertical, where we hire “outside trucks” in markets our fleet does not service such as Illinois and Texas, also increased.service. Utilizing “outside trucks” allows us to scale our operations and serve our national clients in emerging markets with low risk.

Our revenuesrevenue consisted of the following during the yearyears ended December 31, 2024,2025, and 20232024:

Net (loss) income

Net (loss) income for the years ended December 31, 2024 2025 and 20232024 was $174,871$(7,344,586) and $542,351,$174,871, respectively. The change of net income was due to the decrease in revenue and lowergross profit marginas duringwell 2024.as increased stock-based compensation.

The NLC information, including the related estimated total tonnage, has been prepared by, and is the responsibility of, the Company’s management. TAADOur LLPprincipal accountant has not audited, reviewed, reviewed, examined, compiled or applied agreed-upon procedures with respect to such NLC information and, accordingly, TAADour LLPprincipal accountant does not express an opinion or any other form of assurance with respect thereto. The TAADreport LLPof reportour principal accountant relates to the Company’s previously issued financial statements, and it does not extend to the NLC information and should not be read to do so.

As of December 31, 20242025 and December 31, 2024, 2023, we had cash of $557,619$1,202,395 and $1,455,976,$557,619, respectively. To date, we have financed our operations primarily through revenueits operations, generatedthe proceeds from operations. the issuance of common stock, as well as strategic financing.

WeDuring believethe thatyear ended December 31, 2025, we had a net loss of $7,344,586 and net cash used in operations of $1,781,512, which resulted primarily from an increase in professional fees resulting from our currentIPO, levelsnon cash stock-based compensation expense of cash$5,363,550, willas well higher cost of revenue, mainly driven by increased bedepreciation sufficientand amortization, facility-related expenses such as parking rent and increased current income tax expense from prior years liabilities. Subsequent to meetDecember 31, 2025, we have expanded our anticipatedbusiness cashoperations needsto forcertain new territories and have raised service prices in response to market changes. Additionally, approximately of $2 million of our operationsoutstanding forloan atreceivable leastare theexpected nextto 12be collected months,in including2026 and will be used in our anticipatedoperations. costsCurrently, associatedwe are working to improve our liquidity and capital sources. In order withto becomingfully aimplement publicour reportingbusiness company.plan and sustain continued growth. We may, however, in the future require additional cash resources due to changing business conditions, implementation of our strategy to expand our business, or other investments or acquisitions we may decide to pursue. If our own financial resources are insufficient to satisfy our capital requirements, we may seek to sell additional equity or debt securities or obtain additional loans. The sale of additional equity securities could result in dilution to our shareholders. The incurrence of indebtedness would result in increased debt service obligations and could require us to agree to operating and financial covenants that would restrict our operations. Financing may not be available in amounts or on terms acceptable to us, if at all. At the present time, however, we do not have commitments of funds from any lenders or potential investors. Any failure by us to raise additional funds on terms favorable to us, or at all, could limit our ability to expand our business operations and could harm our overall business prospects.

Operating activities providedused net cash of ($593,734)$1,781,512 during the year ended December 31, 2024,2025, and $2,008,219$593,734 during the year ended December 31, 2023.2024. Cash providedused in operating activities increased by operating activities decreased by approximately $2,601,953$1,187,778 primarily due to a decrease in net income of $339,308, decrease in amortization(loss) of ROU of $189,551,$7,519,457, the recognition of astock-based non-cash rent expensecompensation of $433,574, depreciation of $54,900, a decrease deferred taxes of $123,163, $5,363,550, and an overall decrease of $1,967,544$1,109,896 from the change in operating assets and liabilities, for the year ended December 31, 2024 2025 in comparison of the year ended December 31, 2023.2024.

Financing activities usedprovided net cash of $8,281,657 during the year ended December 31, 2025 and $907,358 during the year ended December 31, 2024, and ($205,870) during the year ended December 31, 2023.2024. Cash used in financing activities increased by $1,455,976.$7,374,299. The increase in December 31, 2024, 2025, amount is due to $1,100,00$8,459,232 in proceeds from loansthe payable and $192,642issuance of deferredcommon stock, financingoffset costs.by $1,124,039 in repayments of loans payable.

Material Cash Requirements from Known Contractual and Other Obligations The following table summarizes our contractual obligations as of December 31, 2025 and as for the 12 months thereafter:

In JuneJuly 2016,2025, the FASB issued ASU 2016-13,2025-05, “Financial Instruments -– Credit Losses (“Topic 326”)”.: TheMeasurement ASU introduces a new accounting model, the Current Expectedof Credit Losses for Accounts Receivable and Contract Assets. The amendments modelprovide (“CECL”),a whichpractical requiresexpedient earlierand, recognitionif applicable, an accounting policy election to simplify the measurement of credit losses for certain receivables and additionalcontract disclosures related to credit risk.assets. The CECL modelamendments utilizes a lifetime expected credit loss measurement objective for the recognition of credit losses at the time the financial asset is originated or acquired. ASU 2016-13 isare effective for annual periodreporting periods beginning after December 15, 2022,2025, includingand interim reporting reporting periods within those annual reporting periods. Early adoption is permitted in any interim or annual period in which financial statements have not been issued or made available for issuance. The Company hasis adoptedcurrently evaluating the impact of this amendment and does not expect that the adoption of this guidance as of January 1, 2023, and it did notwill have a material impact on its consolidated financial statements.position, results of operations, or cash flows.

We are a truckload services and solutions provider focused on the recycling export supply chain. We have become a key player in the New Jersey and Pennsylvania regional trucking market for waste paper. In addition to waste paper, our portfolio also includes the shipment of scrap metal and wooden logs from large waste companies, recycling centers and commodity traders to the ports of Newark, NJ, and Philadelphia, PA. We also provide import transportation services at thethese portsports, of Newark and Philadelphia, under which we transporttransporting cargo-filled containers from the ports to our customers’ designated delivery locations. We continue to expand our footprints domestically and internationally and have ventured into the recycling export transport markets in Tampa, Jacksonville, and Miami, FL, and Baltimore, MD, in 2023, and Ensenada, Mexico in 2024, and Houston, Texas in 2025. We intend to explore the international market in Latin America, including Chancay, Peru, in the near future.

Comparison of Three Months Ended March 31,June 30, 2026 and 2025

The following table sets forth key components of our results of operations during the three months ended MarchJune 31,30, 2026 and 2025, together with the corresponding period-over-period changes.

Revenue for the three months ended MarchJune 31,30, 2026 and 2025 was $4,106,943$4,640,068 and $3,811,610 ,$3,968,924, respectively, representing an increase of $ $295,333$671,144 or 8%.17%. The revenue increase in the first second quarter of 2026 was mainly due to our expansion into new markets as well asmarkets, a substantial increase in import revenue.revenue, as well as service price increases in response to market changes.

Our revenue consisted of the following during the three months ended MarchJune 31,30, 2026, and 2025:

Waste Paper. Revenue attributable to the transportation of waste paper fellrose to $2,065,017$2,225,573 for the three months ended MarchJune 31,30, 2026, a 20.2%6.9% change from $2,588,015$2,082,560 in the prior-year period. The decreaseslight increase was principally attributed to aload lowerprice volumeimprovements ofper outboundorder loads originating from recycling plants, driven by a shift in domestic mill demanddue to fulfill the increased containerboardexport recycling capacity.demand.

Import. Import-related revenue increased to $1,409,083$1,635,998 compared with $870,714$1,231,751 in the three-month period ended MarchJune 31,30, 2025, representing a 61.8%32.8% increase. The increase was primarily attributable to an increase in production, which is a resultshift oftoward largehigher-value loads and higher rates realized on import clientcontainer acquisitionmovements, andtogether with increased production volume driven by our ability to service additional import containers with new equipment that isnew, versatile and adjustable to provide double usage to handle more import containers.equipment.

Metal. Revenue derived from the movement of ferrous and non-ferrous scrap metals grew to $565,647$606,267 as compared to $213,643$467,353 in the prior-year quarter, a period-over-period increase of 164.8%.29.7%. The increase largely reflects growth in customer production volumes, together with strong global demand for recycled non-ferrous material. Elevated commodity prices have increased the volumevalue ourof scrap metalfeedstock, customersand producedconstrained indomestic thisoutlets year.for Thecertain tariffs imposed on imported non-ferrous metals along with metal recycling mills being full of inventorygrades have helpedcontinued keepto non-ferroussupport andexport scrap metal exports strong.flows.

Plastic. Revenue from the plastic commodity vertical reached $7,268,$33,105, a period-over-period decrease of 87.0%41.6% compared with $55,790$56,655 in the prior-year quarter. ThisThe decrease continues toreflects bethe ledcontinued bycontraction of export markets for recovered plastics, as key Southeast Asian destinations have implemented import restrictions and low virgin resin prices have reduced demand for recycled feedstock. Plastics represent a decreasenon-core invertical USfor plasticsthe exports to China caused by tariff negotiationsCompany and sensitivityan toimmaterial theportion riseof intotal shipping costs.revenue.

Costs of revenue Our cost of revenue includes all directly related costs to deliver our services, which includes independent contractor drivers, insurance, truck maintenance costs, equipment rental, parking rent expense, dispatch service fees, depreciation and amortization expense, and other directly related costs. Our costs of revenue for the three months ended MarchJune 31,30, 2026 and 2025 were $4,274,056$4,262,551 and $3,701,479,$3,996,855, respectively, representing an increase of 15.5%.7%.

Gross profit As a result of the foregoing, our gross profit decreasedincreased by $277,244$405,448 or 251.7%1,452% to $377,517 for the three months ended June 30, 2026 from $(167,11327,931) for the three months ended MarchJune 31, 2026 from $110,131 for the three months ended March 31,30, 2025. As a percentage of revenue, gross profit margin decreasedincreased to 8% for the three months ended June 30, 2026, as compared to (40.7)% for the three months ended March 31,June 2026, as compared to 3% for the three months ended March 31,30, 2025.

General and administrative expenses Our general and administrative expenses consist primarily of automobile, office, insurance, payroll and rent expenses. Our general and administrative expenses increaseddecreased by $29,708$843,039 or 6%54% to $546,956$718,143 for the three months ended MarchJune 31,30, 2026 from $517,248$1,561,182 for the three months ended MarchJune 31,30, 2025. This change primarily results from a substantial increasedecrease in professional fees incurred during the three months ended MarchJune 31,30, 2026 as well as stock-based compensation of $985,550 recognized during the three months ended June 30, 2025.

We recorded a provision for income benefits of $0 for the three months ended MarchJune 31,30, 2026, as compared to $93,660$108,819 for the three months ended MarchJune 31,30, 2025.

Net loss for the three months ended MarchJune 31, 30, 2026 and 2025 was $653,732$306,711 and $528,475,$1,531,523, respectively. The increasedecrease in net loss was primarily due to a reduction in the general and administrative expenses, partially offset by an increase in costs of revenue.

The table below shows both the total NLCs and a breakdown of NLCs by commodity type during the threesix months ended MarchJune 31,30, 2026 and 2025. Our revenue generation directly corresponds to NLC but is also impacted by the rates charged to customers.

For the threesix months ended MarchJune 31,30, 2026, the NLC for Waste Paper declined by 980,1,220, or 24.94%,17.6%, to 2,949,5,695, from 3,9296,915 for the threesix months ended MarchJune 31,30, 2025. The decrease was primarily attributed attributable to an industry-wide decrease in scrap paperlower export volumevolumes withof recovered fiber industry-wide, as new domestic demandcontainerboard stillcapacity risingcontinued fromto USabsorb papera mills.greater share of available material. The impact of the volume decline on revenue was partially offset by improved pricing per load.

For the threesix months ended MarchJune 31,30, 2026, the NLC for Metal increased by 418469, or 171.31%,58.0%, to 662,1,278, from 244809 for the threesix months ended MarchJune 31,30, 2025. The increase was dueprimarily attributable to consistent orders order volume from scrap metal clientscustomers acquired in 20242024, intogether thewith wastesustained metalexport spacedemand andfor non-ferrous material as constrained domestic aluminumoutlets millsfor beingcertain fullgrades promptingcontinued anto increasedirect inscrap the toward export of non-ferrous metals.channels.

For the threesix months ended MarchJune 31,30, 2026, the NLC for Log decreased by 14,18, or 20.59%,9.4%, to 54,173, from 68191 for the threesix months ended MarchJune 31,30, 2025. The decrease primarily reflectedreflects aan push byelevated logprior-year exportedcomparison, toas beatshippers limitationsaccelerated on the volume of trees deforested for loggingvolumes in the Newfirst Yorkhalf stateof we2025 servicein andresponse ato trade developments affecting forestry products, including the suspension of production onU.S. USlog lumberimports by China in March 2025 and the subsequent redirection of 2025 that was reroutedmaterial to Vietnamalternative atAsian adestinations. higherVolumes demand.in the current period have largely normalized.

For the threesix months ended MarchJune 31,30, 2026, the NLC for Import increased by 492,703, or 42.27%,25.3%, to 1,656,3,478, from 1,1642,775 for the threesix months ended MarchJune 31,30, 2025. The increase was dueprimarily attributable to increased consistent workorder volume from new import customerscustomers, andtogether with added versatility from import focusedimport-focused equipment allowingthat permits multi-use efficiencyof a single container and improves the Company’s ability to navigate andwork overcomethrough congestion inat the ports the Companyit services. TheA Company has seen success enabling import customers to increase inbound volume to beat imposing tariffs. The Import client acquisition strategy will continue to be a targetportion of the increase reflects customers advancing inbound shipments in anticipation of tariff changes, and the Company does not expect that activity to recur at the same level. Import customer acquisition remains a strategic priority for the Company.

For the threesix months ended MarchJune 31,30, 2026, the NLC for Plastic decreased by 68,103, or 88.31%,70.5%, to 9,43, from 77146 for the threesix months ended MarchJune 31,30, 2025. The decrease was dueprimarily attributable to industry-wide decreasesthe incontinued exportscontraction of export markets for plastics.recovered plastics, which represent a non-core vertical for the Company.

For the threesix months ended MarchJune 31,30, 2026, the total NLC decreased by 152,170, or 2.77%,1.6%, to 5,330,10,667, from 5,48210,836 for the threesix months ended MarchJune 31,30, 2025. DespiteThe themodest slight decreasedecline in NLC, thetotal Companyload iscount seeingwas muchaccompanied moreby stabilitya shift in emergingvolume verticalsmix like metal and import as the focus of its growth is yielding stronger revenue results. Paired withtoward the Company’s import and metal verticals, which carry higher revenue per load, and total revenue increased operationalover capacitythe tocomparable beprior-year moreperiod efficientnotwithstanding withthe itslower newlyload count. The Company’s recently acquired equipment that providespermits double usage of a single container viaacross import and export,export themovements, Company’s ability of navigating effectively through port congestion will allowwhich the Company tobelieves significantlywill reducesupport reduced idle time, improveimproved asset utilization,utilization and strengthena itsstronger competitive advantage position in high-volume port operations.

As of MarchJune 31,30, 2026 and December 31, 2025, we had cash of $836,167$4,698,480 and $1,202,395, respectively. To date, we have financed our operations primarily through revenue generated from operations as well as our proceeds received from our IPO in January 2025.2025, and net proceeds from our June 2026 private placement.

During the threesix months ended MarchJune 31,30, 2026, we had a net loss of $653,732$960,443 and net cash used in operations of $790,793.$918,415. During 2026, we have begun to expand our business operations to certain new territories and have raised service prices in response to market changes. Additionally, approximately of $2 million of our outstanding loan receivable are expected to be collected in 2026 and will be used in our operations. Currently, we are working to improve our liquidity and capital sources. In order to fully implement our business plan and sustain continued growth. We may, however, in the future require additional cash resources due to changing business conditions, implementation of our strategy to expand our business, or other investments or acquisitions we may decide to pursue. If our own financial resources are insufficient to satisfy our capital requirements, we may seek to sell additional equity or debt securities or obtain additional loans. The sale of additional equity securities could result in dilution to our shareholders. The incurrence of indebtedness would result in increased debt service obligations and could require us to agree to operating and financial covenants that would restrict our operations. Financing may not be available in amounts or on terms acceptable to us, if at all. At the present time, however, we do not have commitments of funds from any lenders or potential investors. Any failure by us to raise additional funds on terms favorable to us, or at all, could limit our ability to expand our business operations and could harm our overall business prospects.

The following table provides detailed information about our net cash flow for the threesix months ended MarchJune 31,30, 2026 and 2025:

Cash used in operating activities decreased by approximately $93,650$221,161 for the threesix months ended MarchJune 31,30, 2026, compared to the same period in 2025, primarily due to lower working capital outflows, including reduced increases in contract assets of approximately $308,947$344,791 and prepaid assets of approximately $112,567,$268,492, as well as the absence of deferred tax impacts recognized in the prior-year period. These changes were partially offset by higher accounts receivable balances and decreases in accounts payable.

Investing activities provided cash of $500,000 during the threesix months ended MarchJune 31,30, 2026, and used a net of $6,392,574$6,712,944 during the threesix months ended MarchJune 31,30, 2025. The change was primarily attributable to lower purchases of property and equipment, a receipt of $500,000 decreaserelated into deposits on property and equipment – related party, and the absence of $5,700,000 note receivable advances made during the prior-year period.

Financing activities usedprovided cash of $75,435$3,914,500 during the threesix months ended MarchJune 31,30, 2026, and provided a net of $8,459,232$8,782,257 during the threesix months ended MarchJune 31,30, 2025. Cash from financing activities decreased by $8,534,667.$4,867,757. The change is primally due to the $8,459,232$4,329,232 decrease in the issuance of common stock, an increase of $9,432$28,872 of finance lease payments,payments and a net of $66,003$181,153 todecrease in repayments of loans payable.

The following table summarizes our contractual obligations as of MarchJune 31,30, 2026 and as for the 12 months thereafter:

Accounts receivable represent revenue earned for which the Company has not yet received payment. Accounts receivable are recorded at the invoiced amount and adjusted for amounts management expects to collect from balances outstanding at period-end. The Company adoptadopts the current expected credit loss model (“CECL model”) to estimate the expected credit losses, which is determined by multiplying the probability of default. The Company estimates the allowance for credit loss based on an analysis of specific accounts and an assessment of the customer’s ability to pay, among other factors. The allowance for credit losses was $123,371 as of MarchJune 31,30, 2026 and December 31, 2025.

The Company evaluates uncertain income tax positions taken or expected to be taken in a tax return for recognition in its consolidated financial statements. The Company was not required to recognize any amounts from uncertain tax positions as of MarchJune 31,30, 2026 and December 31, 2025. The Company’s conclusions regarding uncertain tax positions may be subject to review and adjustment at a later date based upon ongoing analyses of tax laws, regulations and interpretations thereof, as well as other factors. Generally, federal, state and local authorities may examine the Company’s tax returns for three years from the date of filing.