NASDAQ: ETS

Our Industry

We mainly compete in the route delivery industry, which has several material barriers of entry, including:

● Substantial time and capital investment. Establishing a robust and efficient logistics network requires substantial financial and time commitments. This includes investments in employee recruitment and training, software procurement and maintenance, regulatory compliance, and the acquisition of transportation assets such as trucks, vans, and bikes.

● Technological proficiency. Operational efficiency and customer satisfaction rely on: (i) advanced technologies, including route optimization software, real-time tracking systems, and automated dispatching software, (ii) continuous investments in technology training, and (iii) continuous efforts in developing, maintaining, and upgrading the technological infrastructure to keep pace with the industrial changes and challenges.

● Regulatory barriers. It could be both time-consuming and costly to comply with various local, state, and federal regulations related to transportation, safety, and data privacy. For further information on the relevant laws and regulations, see “Item 1. Business—Regulations.”

● Balancing service quality and cost efficiency. Customers expect fast, reliable, and seamless delivery services at competitive prices. Maintaining a reputation and gaining customer trust while optimizing costs in a competitive market presents an ongoing challenge.

● Effective Management. Strong leadership and strategic decision-making are critical for aligning operations with market demands and driving long-term success.

As of the date of this annual report, we primarily operate and compete in California. Our competitors range from large multinational corporations to regional service providers, including Amazon Logistics, Aramex, DHL, DoorDash, DPD, Grubhub, Postmates, UPS,

USPS, and certain regional logistics companies. We believe the route delivery industry is highly competitive, with key competitive factors including:

● Price Pressure. Customers that need delivery services can easily switch service providers due to low replacement costs, leading to intense price competition.

● Service quality. Speed and reliability are critical factors that influence customer decisions when selecting a delivery provider.

● Technology adoption. Companies that fail to implement advanced technologies, such as AI-powered route optimization or real-time tracking systems, will risk falling behind more tech-savvy competitors.

● Financial resources. We believe the e-commerce boom has attracted a surge of large companies entering into the parcel delivery industry, such as Uber Eats, DoorDash, and Instacart. These large companies usually have significantly greater financial resources and revenue streams than smaller competitors.

● Regional specialization. Local or regional providers often cater to niche markets, such as medical supplies or perishable goods, enabling them to carve out specialized segments and compete effectively against larger players.

● Seasonal Demand. Peak periods, such as holidays, create intense competition for limited resources, including drivers, vehicles, and fulfillment centers. Scalability and efficient resource allocation become critical competitive factors during these times.

Our Services

For the reporting period from December 1, 2022 to November 30, 2025, and as of the date of this annual report, 100% of our revenue was derived from providing last-mile delivery services.

As of the date of this annual report, we have approximately 26 full-time employees, including approximately 20 drivers, and we own a fleet of approximately 23 vehicles consisting of trucks and trailers.

We operate seven days a week, typically from 6:00 am to 11:00 pm. Our designated service area, where we provide exclusive pickup and delivery services to our customer, spans approximately 1,665.28 square miles. On an average day, our operations include 1,100 to 1,700 stops, with around 1,800 to 2,500 packages to be picked up and delivered per day on average. However, during peak seasons, we estimate that we make approximately 2,000 stops on a daily basis. Our pickup and delivery process generally follows a structured sequence of steps to ensure efficiency and reliability.

Package Pickup

We collect packages for delivery from designated locations assigned by our customer, load packages into our vehicles, and implement necessary safety measures to ensure secure storage and handling throughout the delivery process.

To manage fluctuations in service demand, we receive package volume forecasts from our customer, usually one week before the service day. Based on these forecasts, we strategically plan and allocate our trucks and drivers to ensure adequate service capacity. To optimize delivery routes, particularly during peak seasons, we utilize Fedex-assigned GroundCloud software on all of our delivery trucks. Powered by AI, GroundCloud enhances operational efficiency by monitoring driving conditions, detecting risky and unsafe driving behaviors, and optimizing delivery routes in real time. As of the date of this annual report, our subscription to GroundCloud is set to renew automatically.

Package Transportation

We optimize transportation routes, assign drivers efficiently to their respective workloads, monitor real-time delivery status, and maximize efficient delivery by relying on the operation team’s expertise and leveraging advanced technology. Each of our delivery vehicles is equipped with GPS and route navigation systems to enhance accuracy and efficiency. We transport packages from distribution centers to the address specified or designated for each package. Unlike a predetermined package delivery sequence, our drivers determine their own routes and delivery sequence based on real-time traffic conditions and their personal experience in their service area, supplemented by route recommendations from the installed navigation technology.

Package Delivery

Delivery recipients are able to track their shipment status in real-time through the tracking system. Our delivery team is professionally trained to ensure packages are delivered to the correct address and interact positively with delivery recipients. To minimize mis-deliveries, we utilize GroundCloud, a navigation and support software that assists our drivers throughout their routes. Since commencing operations, we have experienced three misdelivery incidents. If a complaint is filed with FedEx, FedEx will notify us and we will conduct an internal review. Drivers identified as responsible will receive additional training to mitigate the risk of recurrence.

Post-Delivery Feedback

We maintain detailed logs that track each driver’s total stops, packages delivered, estimated speed, driving distance, and overall drive time. These records help us evaluate service performance and operational efficiency. We actively address customer feedback, inquiries, and complaints, taking prompt action to investigate and resolve any reported issues.

Our Customer

For the reporting period from December 1, 2022, to November 30, 2025, and as of the date of this annual report, FedEx was our sole customer, accounting for 100% of our revenue. As an independent contractor for FedEx, we provide last-mile delivery service, bridging the gap between FedEx and the final delivery recipients. FedEx has designated us as the exclusive service provider in certain service regions in California spanning approximately 1,665.28 square miles.

Material Terms of Customer Engagement

We entered into an Independent Service Provider Agreement with FedEx. The material terms of the current agreement include the following: (i) we agree to provide package pickup and delivery services to FedEx with our own vehicles and our own employees, and we retain exclusive authority to determine the best means to meet the expectations and demands of shippers and recipients, including complete discretion over and responsibility for route design, delivery sequence, type and number of equipment, and staffing and personnel decisions, consistent with other terms of the agreement; (ii) we have the exclusive right and obligation to provide pickup and delivery services that serve both businesses and residential recipients in certain contracted service areas, which areas may be redefined by written agreements of both parties; (iii) our employees providing the services must satisfy certain appearance, safety, qualification, legal, and regulatory requirements; (iv) our delivery vehicles must satisfy certain size, type, color, maintenance, inspection, legal, and regulatory requirements; (v) the right, title, and interest in and to data and information accessed through, created in the use of, or made available in connection with the provision of the services will remain the exclusive property of FedEx and no right in or to such data is granted, transferred, or assigned to the Company; (vi) we derive revenue from both fixed service charges and activity-based charges incurred under the agreement, with average weekly revenue of approximately $67,623 during peak season and $48,645 during off-peak season. The charges are incurred and paid on a weekly basis and typically include (a) weekly service coverage (fixed weekly service charges), (b) pickup and delivery stop charges and e-commerce stop charges (activity-based charges for each stop), (c) package charges (activity-based charges for picking up or delivering each package when making a stop), (d) surge stop charges (activity-based charges for each stop that exceeds the daily stop threshold specified in the agreement), (e) brand promotion charges for using FedEx’s logos and marks on employee apparel and vehicles during the provision of the services, and (f) large package mix charges (activity-based charges based on the percentage of large packages delivered), etc.; and (vii) the term of this agreement commenced on October 12, 2024 and will continue through February 20, 2026, unless terminated earlier or extended. This agreement may be terminated without cause at any time by mutual written agreement, or with cause or for changed circumstances by either party. Both parties agree there is no obligation or expectation for the entry into a subsequent agreement at the expiration of this agreement, nor is there any guarantee of, or right to, a subsequent agreement. A revised new agreement was updated and commenced on February 21, 2026 by the Company and FedEx, with a term through January 1, 2027.

Customer Retention

We have maintained a stable relationship with FedEx for the reported periods. To retain FedEx’s business, we focus on the following strategies:

● Meeting Performance Metrics. We consistently aim to meet key performance metrics such as on-time delivery rates, package handling accuracy, and customer satisfaction. We use real-time analytics tools to monitor performance and take corrective actions promptly.

● Fostering Strong Communication. We maintain a steady relationship with our customer by keeping open and transparent communication with regional managers and operations teams of our customer and proactively addressing concerns or issues before they escalate and demonstrate a commitment to continuous improvement.

● Investing in Workforce Excellence. We invest in workforce excellence by providing regular training to drivers and staff to ensure compliance with service standards and enhance professionalism.

● Optimizing Operational Efficiency. We optimize operational efficiency by leveraging technology to improve route planning, reduce fuel costs, and enhance delivery speed, and implementing preventive maintenance programs for vehicles to minimize downtime and ensure reliability.

● Scaling Flexibility for Peak Seasons. We scale flexibly for peak seasons by maintaining a roster of part-time or gig drivers who can be activated during peak seasons and maintaining cooperation with subcontractors or other parties for temporary support during high-demand periods.

● Ensuring Compliance and Safety. We ensure compliance and safety by regularly auditing operations to ensure compliance with safety and operational guidelines, and using GPS tracking and other tools to monitor and improve driver behavior.

Our Suppliers

For the reporting period from December 1, 2022 to October 25, 2024 (Predecessor), our main supplier was ARCO, which supplies fuels and independently accounted for approximately 17% of our total operating costs. For the period from October 26, 2024 to November 30, 2024 (Successor), we transitioned to Robinson Oil Corp. as our main fuel supplier to obtain more favorable pricing. Robinson Oil Corp. independently accounted for approximately 14% of our total operating costs for such period. For the year ended November 30, 2025, Robinson Oil Corp. independently accounted for approximately 15% of our total operating costs. These major suppliers were not our related parties. If we lose our major supplier of fuels, we believe it will not have a material adverse impact on our business because of the availability of gas stations and relatively low replacement costs.

Our Competitive Strengths

We believe the following competitive advantages are essential for our success and distinguish us from our competitors.

Service Capacity

Since inception, we have dedicated significant time and capital to building and maintaining our service capacity. See “Item 1. Business—Our Services”. We estimate that it will take approximately two to three years to scale operations to match our current capabilities. The costs range from $2 million to $3 million, covering expenses such as employee recruitment, employee training, truck procurement, software procurement, and compliance maintenance. Of this total, $1 million to $1.5 million is expected to be allocated to truck procurement.

Service Quality

We adhere to strict industrial and contractual standards to maintain high service quality. For example, our delivery staff must meet certain appearance, safety, qualification, and other requirements. Our vehicles for the provision of delivery service must satisfy specific size, type, color, and other requirements. By upholding these rigorous standards, we have been able to maintain a stable relationship with our sole customer for the reported periods. We are committed to improving the reliability and efficiency of our services while ensuring compliance with applicable regulatory requirements. See “Item 1. Business—Regulations.” There have not been any occurrences, warnings, or notifications of non-compliance of our Company with regard to any applicable laws and regulations as of the date of this annual report.

Operating Independence

We operate with full autonomy over our logistics. This includes the recruitment and deployment of our drivers, management and maintenance of vehicles and other equipment, and coordination of deliveries within our service areas. We believe this independence provides us with flexibility in our business operations and enhances our ability to respond to changes and challenges.

Relative Exclusivity in the Service Areas

Our sole customer, FedEx, has designated us as the exclusive service provider in certain service regions. This relative exclusivity in serving our customer reduces direct competition within these designated areas and enables us to focus on optimizing operational efficiency, streamlining delivery routes, reducing vehicle mileage, and improving delivery timelines within our designated zones.

Predictable Revenue Model

FedEx was our only customer for the reported periods. According to our agreement with FedEx, we derive revenue from both fixed service charges and activity-based charges, and the charges are incurred and paid on a weekly basis. See “Item 1. Business—Our Customer.” We believe our revenue from such an arrangement is relatively stable and predictable, resulting in relatively stable cash flows and low risk of bad debts.

Safety Maintenance

We are committed to ensuring the security of people, protecting vehicles from unauthorized entry and use, and preventing theft, loss, damage, destruction, or delay in the handling, transporting, and storing of packages. All of our employees undergo comprehensive training based on our customer’s and our own requirements upon employment and are subject to safety tests and evaluations prior to being permitted to deliver packages independently. All of our vehicles are subject to regular and comprehensive inspections by certified mechanics covering tire checks, wheel inspection, and engine oil inspection. Additionally, all vehicles are subject to regular safety inspections conducted by the station managers, including tire and brake checks. Packages are treated in strict accordance with the proper safety standards depending on the package types.

Professional Management

Our management team has extensive industry and management experience. Each member of our team has, on average, more than a decade of management experience, along with comprehensive knowledge in areas such as financial management, accounting matters, project management, strategy development, customer relationship maintenance, and operational execution. See “Item 10. Directors, Executive Officers and Corporate Governance.”

Growth Strategies

Our growth strategies focus on acquisition/scale expansion, cost optimization, and technological innovation. These strategies are designed to strengthen our competitive position, broaden our market reach, and enhance our operational efficiency and are presented as follows in order of priority.

Expansion of Delivery Routes

We plan to expand our last-mile delivery routes, which are expected to deliver the following three benefits. First, by strategically acquiring new delivery routes, particularly in high-demand metropolitan and suburban areas, we expect to expand our market share and service volume. This expansion will help us to increase revenue and spread fixed costs over a larger volume, ultimately improving profitability. Second, expanding our route network is anticipated to enable us to secure contracts with new customers, such as large e-commerce platforms, retailers, and logistic providers, thereby diversifying our customer base and enhancing our revenue streams. Third, acquiring additional routes in close proximity will help to streamline logistics, optimize delivery sequences, and reduce travel time, fuel consumption, and vehicle wear. This will further improve efficiency and reduce operational costs.

In addition to expanding last-mile delivery, which features relatively short distances, in the long run, we also plan to acquire long-haul trucks to enter the long-haul logistics market. This diversification will enable us to add new revenue by managing the entire logistics chain, from regional distribution centers to last-mile hubs. This service diversification is expected to create a more comprehensive network that can serve clients needing end-to-end logistics solutions, potentially accelerating delivery timelines and capturing additional market share.

As of the date of this annual report, we are actively seeking new delivery routes with the goal of expanding our service areas and exploring connections with potential customers who require last-mile delivery services.

Among our future plans and investments, expanding our delivery routes is our priority. Accordingly, the net proceeds raised from our initial offering are expected to be primarily allocated toward equity acquisitions, asset acquisitions, and other strategic investments in businesses that serve customers requiring last-mile delivery services, enabling us to expand our service area and customer base. As of the date of this annual report, approximately $1.5 million of the proceeds has been used for the development of our Route X application and related research and development activities, as well as for working capital and general corporate purposes. Although we have not yet entered into definitive agreements with new customers, expanding our customer base and service network remains a primary focus of our growth strategy.

Operational Optimization

We aim to further optimize our operations and maximize our cost-effectiveness by implementing the following measures. First, with expanded route coverage, we have adopted and will continue utilizing flexible staffing models, including part-time drivers and seasonal hires, to efficiently handle fluctuating delivery demands. Additionally, data-driven scheduling helps align workforce needs with package volume. Second, we plan to invest in robust financial systems that streamline payroll, expense tracking, and budgeting. These enhancements will improve cost control and provide greater financial visibility to support our business growth. Third, we remain committed to investing in employee development and retention. Competitive wages and benefits help us attract and retain skilled drivers, reducing turnover and ensuring a reliable workforce.

As of the date of this annual report, we have already implemented several of these optimization measures and will continue refining our operations to enhance overall efficiency.

App Development

We have partnered with a third-party developer to create an interactive app platform that connects third-party drivers with merchants seeking route delivery services. Once developed, this platform will enable us to search for delivery opportunities based on our drivers’ geographic location, while merchants can post delivery requests and select drivers based on factors such as experience, availability, and vehicle type. The platform is expected to generate revenue by facilitating these connections between drivers and merchants. Funding for the app’s development comes from our own resources, and approximately 5% of the net proceeds from our initial public offering will be allocated for ongoing maintenance and upgrades. The first version of this APP is available for testing. We expect to launch the app platform in the near future.

Eco-friendly Transition

As environmental concerns and sustainability trends continue to drive change, we are committed to adopt eco-friendly delivery solutions, such as electric vehicles, bikes, and carbon-neutral delivery methods. We believe this initiative is essential for both the future of our business and the long-term health of the environment. Transitioning to electric vehicles (EVs) offers several strategic advantages: (i) moving from fuel-based vehicles to electric vehicles has the potential to lower fuel costs and mitigate the volatility associated with fluctuating fuel prices. While the initial investment in electric vehicles is higher, the long-term savings in fuel, maintenance, and tax incentives are expected to deliver substantial financial benefits; (ii) as consumer preferences increasingly favor sustainability, our commitment to eco-friendly practices enhance our appeal to environmentally conscious consumers and corporations. This alignment is anticipated to strengthen our reputation as a forward-thinking company dedicated to reducing its carbon footprint, further positioning us a preferred partner in the market place; and (iii) electric vehicles generally require less maintenance than traditional fuel vehicles, resulting in lower repair costs and reduced downtime. We believe that the longer lifespan of the electric vehicles will also contribute to lower overall costs and improve fleet availability, ensuring reliable service for our customers.

To facilitate this transition, we are engaging with electric vehicle dealers and negotiating pricing. We have purchased three electric trucks as of the date of this annual report, and we plan to deploy additional electric vehicles as our operations expand and capital resources permit.

Technology and Automation

We believe that advances in technology, such as AI-powered customized logistic software and autonomous vehicles, will revolutionize the logistics industry. We plan to invest in suitable AI technologies to further optimize delivery routes and operations. For example, we intend to engage AI solution providers for intelligent vehicles, to develop customized logistics software tailored to our specific needs. Such solutions are expected to integrate advanced features, such as comprehensive vehicle tracking, digital fleet

management, intelligent dispatching, and data-driven analytics. By leveraging real-time data, AI-powered monitoring, and predictive maintenance, such technologies are expected to enhance operational efficiency, improve maintenance, optimize delivery schedules, and support data-driven decision-making based on seasonal and demand-based trends. These innovations will contribute to the sustainable development of our fleet. Additionally, we recognize the long-term potential of autonomous vehicle technology. While not yet commercially reliable, when available, autonomous vehicle will offer substantial cost savings and scalability. Self-driving trucks can reduce the reliance on human drivers for long-haul routes, helping to address both high labor costs and staffing challenges. Furthermore, AI-optimized autonomous vehicles can be utilized to enable real-time route adjustments, reduce idle time, conserve fuel or battery life, and ensure more cost-efficient and faster deliveries.

Our plan is to gradually update our delivery system by integrating customized AI technology developed by third-party providers and expect to integrate autonomous vehicles within the next three to five years.

Intellectual Property

Our future business success may materially dependent on protecting our intellectual property (“IP”) rights, including those related to our ROUTE X mobile application (the “APP”), a key asset supporting our last-mile delivery operations. The original prototype of ROUTE X, including its source code, functional design and associated IP, is exclusively owned by us. We have engaged third-party service providers to perform development, upgrade, regional adaptation and other research and development (“R&D”) work for the APP, with our agreements stipulating that all deliverables generated from such services will vest in us exclusively upon full payment, and that the third parties shall indemnify us for any third-party IP infringement claims related to the deliverables. Our dedicated operations team maintains regular and detailed communication with these third-party service providers to align on specific business requirements, detailed upgrade plans and R&D milestones for the APP and other proprietary technology projects, ensuring the R&D direction is consistent with our overall business development objectives.

Notwithstanding these contractual provisions and the established communication mechanism with third parties, material uncertainties regarding our IP rights and the commercial application timeline of our R&D results remain. We cannot guarantee the full enforceability of these IP assignment and indemnification terms in all circumstances, nor can we ensure that third-party service providers will not breach their contractual obligations related to IP confidentiality and ownership. We have not yet filed any patent, trademark or copyright applications for the upgraded and regionally adapted versions of ROUTE X and our other in-development proprietary technologies, and our current IP protection relies on trade secret laws and contractual restrictions, which are inherently subject to risks of unauthorized access, use or misappropriation of our confidential technical and business information. Additionally, we face the risk that third parties may assert IP infringement claims against our upgraded ROUTE X, regional adaptation deliverables or other R&D outputs, and defending against such claims—even meritless ones—could result in significant legal costs, divert management and operational resources, and delay the potential commercialization of these technologies in target regions.

Furthermore, we do not warrant that the developed ROUTE X platform, upgraded software, regionally adapted deliverables or other R&D products will be promptly launched and integrated into our actual business operations. The timeline for their commercial application is highly dependent on the scale expansion of our last - mile delivery business and the advancement of our market coverage in target regions (Hong Kong and Singapore), as well as the effective promotion and execution of our operations team in aligning R&D outcomes with on - the - ground business needs. Beyond these core factors, the application timeline is also subject to a range of additional material uncertainties, including but not limited to: the technical maturity of R&D outputs and their compatibility with our existing operational systems, which may require iterative testing, bug debugging and rectification to meet our agreed acceptance standards; compliance with evolving local regulatory frameworks in target regions, including data protection, online safety and transportation industry - specific rules, which may necessitate further customizations to our technologies; the third - party service providers’ resource allocation, project execution capabilities and adherence to agreed delivery timelines, as unforeseen delays in third - party deliverables will directly impact our deployment schedule; the availability of our internal financial, human and technical resources for the onboarding, training and operational support of new R&D products; the results of pilot testing of these technologies in real - world operational scenarios, which may necessitate further refinements prior to full - scale rollout; and unforeseeable force majeure events or changes in our business requirements that may extend the R&D, testing or deployment process. Any adverse outcome related to these IP uncertainties, or any material delay in the commercial application of our R&D results due to the aforementioned factors, could have a material negative impact on our business, financial condition and results of operations.

Our Employees

The tables below provide a breakdown of our employees by type and function as of November 30, 2025.

Full-time

Number of employees

Administration

Finance

Legal

Operation

Logistics

Number of employees

1

1

1

1

In addition, as of the date of this annual report, we have approximately 26 full-time employees, including approximately 20 drivers. We believe the attraction, development, and retention of skilled employees contribute to our long-term success. To attract talent, we offer market-aligned wages, allow employees a certain degree of flexibility in work shifts to accommodate personal needs, and provide incentives for new hires and current employees who refer qualified candidates with appropriate skills. In addition to cash compensation, we offer complementary benefits, including performance-based bonuses, short-term disability insurance, unemployment insurance, as well as medical insurance and 401(k) retirement plans for select employees.

We recruit and select employees based on certain key criteria, mainly including (i) relevant previous experience in package delivery, courier services, or logistics, and familiarity with last-mile delivery operations or routes in a similar service area, (ii) technical skills and proficiency in using GPS devices, route optimization software, and mobile delivery apps, and basic understanding of vehicle maintenance, (iii) a clean and verifiable driving record, free of major infractions such as driving under the influence or reckless driving, and the possession of a valid driver’s license appropriate for the type of delivery vehicle, and (iv) safety awareness, assessed by whether the candidate demonstrates a commitment to adhering to all traffic and workplace safety regulations, and participation in safety training programs or certifications.

To enhance our workforce excellence, we provide comprehensive onboarding training for new drivers, focusing on route optimization, safety protocols, and customer service. Promotions and pay raises are awarded based on performance milestones. Our training programs are designed in accordance with the FedEx-issued safety guide. Our station managers and experienced drivers take turns conducting in-person training sessions for new drivers. Additionally, new drivers must complete online training and pass assessments on GroundCloud. We are committed to fostering a strong culture of safety. Prior to each driver commencing their deliveries, they must successfully complete multiple tests and assessments to ensure they meet our rigorous standards.

There is no collective bargaining agreement that covers our employees. For the 2025 fiscal year, we have not experienced any interruptions of operations or work stoppages due to labor disagreements or disputes. We strive to maintain positive labor relations through open communication and proactive conflict resolution measures.

Insurance

We maintain certain insurance policies to safeguard against risks and unexpected events. For example, we have non-trucking liability insurance, workers’ compensation, and employment practices liability insurance, with each insurance coverage category being subject to limitations as provided by the insurance policies. We believe our current insurance coverage is adequate for our business requirements and is consistent with customary industry practice. We renegotiate and renew our insurance contracts annually. We do not anticipate any difficulty in renewing contracts we currently maintain on the same terms. We purchased directors’ and officers’ liability insurance on August 21, 2025. During the reporting periods included in this annual report, we did not make any material insurance claims in relation to our business.

Seasonality

Our business is generally subject to seasonal fluctuations. We usually generate more revenue in October and from mid-November to late December each year. We believe that such seasonality is mainly because our customer has higher service demands during the holiday seasons. Historically, the revenue generated during our peak seasons is estimated to account for approximately 10% to 12% of our annual revenue.

Corporate History and Structure

We have conducted the following corporate restructuring steps:

● On May 27, 2020, JAR Transportation Inc was incorporated under the laws of the State of California as a general stock corporation;

● On April 3, 2024, our holding company, Elite Express Holding Inc., was incorporated under the laws of the State of Delaware as a corporation;

● On October 25, 2024, Elite Express Holding Inc. completed the acquisition of the 100% equity interest in JAR Transportation Inc; and

● On December 19, 2024, our stockholders and board of directors approved to effect a reverse stock split with respect to the issued and outstanding shares of both our Class A common stock and Class B common stock, in each case at a ratio of one for six, such that every holder of Class A common stock shall receive one share of Class A common stock for every six shares of Class A common stock held, and every holder of Class B common stock shall receive one share of Class B common stock for every six shares of Class B common stock held. Unless the context suggests otherwise, all references to our Class A common stock and Class B common stock in the annual report take into account the effect of such reverse stock split.

The following diagram illustrates our corporate structure as of the date of this annual report. For details of our principal stockholders’ ownership, please refer to the beneficial ownership table in the section captioned “Principal Stockholders.”

Notes: All percentages reflect the voting ownership interests instead of the equity interests held by each of our stockholders given that each holder of shares of Class A common stock is entitled to one vote per share and each holder of shares of Class B common stock is entitled to 15 votes per share.

(1) Represents 1,666,667 shares of Class B common stock held by Yidan Chen, our Chief Executive Officer and Director, as of the date of this annual report.

(2) Represents 2,500,000 shares of Class B common stock held by Huan Liu, our Chairman of the Board of Directors, as of the date of this annual report.

(3) Represents an aggregate of 12,550,005 shares of Class A common stock held by 14 corporate and individual stockholders, each one of which holds less than 5% of our voting ownership interests.

Regulations

Regulations Related to Transportation and Safety

Our package transportation services are regulated by the Department of Transportation (DOT) and its agencies, including the Federal Motor Carrier Safety Administration (FMCSA), the Federal Highway Administration, and the National Highway Traffic Safety Administration. These agencies oversee our delivery business through regulations on operations, safety, insurance, and hazardous materials. Additionally, ground transportation also falls under state regulations with respect to operations, safety, and insurance. The transportation of hazardous materials in the U.S. is subject to regulation by the DOT’s Pipeline and Hazardous Materials Safety Administration.

We also must comply with FMCSA safety and fitness regulations, including those relating to drug and alcohol testing and hours of service for drivers. Such matters as the weight and dimensions of equipment also fall under federal and state regulations.

The Federal Aviation Administration Authorization Act of 1994 limited states’ authority to regulate the rates, routes, or services of most motor carriers. States may now only exercise jurisdiction over safety and insurance. The Company is registered in those states that require registration.

The Postal Reorganization Act of 1970 created the U.S. Postal Service as an independent establishment of the executive branch of the federal government, and created the Postal Rate Commission, an independent agency, to recommend postal rates. The Postal Accountability and Enhancement Act of 2006 amended the 1970 Act to give the re-named Postal Regulatory Commission revised oversight authority over many aspects of the U.S. Postal Service, including postal rates, product offerings and service standards. We sometimes participate in proceedings before the Postal Regulatory Commission in an attempt to facilitate compliance with fair competition requirements for competitive services.

Our transportation is also subject to compliance with cargo-security and transportation regulations issued by the U.S. Department of Homeland Security, including oversight by the Transportation Security Administration in the U.S.

Our transportation vehicles are subject to regulation under the California Vehicle Code. Pursuant to applicable law, we are required to register all vehicles used in our delivery operations and pay the corresponding fees. Any individual operating our vehicles on public highways must hold a valid commercial driver’s license in compliance with legal requirements. Additionally, our vehicles are subject to regulations governing safe operation, including, but not limited to, driver hours of service, equipment standards, fuel containers, fueling procedures, inspection and maintenance requirements, recordkeeping, and accident reporting. Our vehicles must also comply with statutory size and weight restrictions.

We are also subject to regulations enforced by the California Highway Patrol (CHP) concerning vehicle inspections, driver logs, load securement, and overall safety compliance. Pursuant to Title 13 of the California Code of Regulations, our vehicles and related records are subject to inspection by the California Highway Patrol to ensure compliance with applicable safety and operational requirements.

Furthermore, we are subject to California Occupational Safety and Health (Cal/OSHA) regulations, which require compliance with vehicle safety standards, driver protection measures, and ergonomic guidelines. Under these regulations, we are required to provide written notice to employees if they have been or are being exposed to toxic materials or harmful physical agents at concentrations or levels exceeding those permitted by applicable standards, orders, or special orders, along with details of the corrective actions being taken. Additionally, we must ensure that workplaces, storerooms, personal service rooms, and passageways are maintained in a clean, orderly, and sanitary condition.

Regulations Related to Data Privacy

We are subject to laws and regulations relating to privacy and data protection. For example, the California Consumer Privacy Act (CCPA) of 2018, which came into effect in January of 2020, gives California residents data privacy rights, including allowing consumers to opt out of certain data sharing with third parties, and provides an additional cause of action for data breaches. Moreover, the California Privacy Rights Act, which went into effect on January 1, 2023, significantly modified the California Consumer Privacy Act of 2018, and imposed additional data privacy and protection obligations on certain companies doing business in California.

The collection, use, retention, and sharing of consumers’ personal information in connection with our business operations are regulated under the CCPA. Our collection and processing of consumer personal information must align with the reasonable expectations of consumers, as defined under the law. Additionally, we are required to establish and maintain clear and accessible mechanisms for consumers to submit CCPA requests and provide consent. These mechanisms must be designed to be easily understandable and executable, free from misleading language or interactive elements, and without impairing or interfering with the consumer’s ability to make informed choices.

Regulations Related to Environmental Protection

We are subject to federal, state and local environmental laws and regulations across our operations. These laws and regulations cover a variety of matters such as disclosures, operations and processes, including, but not limited to: properly storing, handling and disposing of waste materials; complying with laws regarding clean air, including those governing emissions; protecting against and appropriately responding to spills and releases and communicating the presence of reportable quantities of hazardous materials to local responders.

In October 2023, the California Air Resources Board’s Advanced Clean Fleets (“ACF”) regulation became effective, requiring certain fleets to transition medium- and heavy-duty vehicles to zero-emission vehicles (“ZEVs”) under phased purchase schedules and milestone options. While the regulation provides flexibility, including purchase exemptions under specified conditions, there is no assurance that exemption relief will be granted in all cases. Although certain medium- and heavy-duty ZEVs are certified and available in the market, availability of suitable ZEV replacements for all current fleet vehicles may remain limited, and supporting charging infrastructure may not yet be sufficient across our terminal network to operate a fully electric fleet. We plan to replace several gasoline-powered trucks with EVs and will assess the cost-effectiveness of further ZEV adoption. We also continue to monitor applicable incentives and developments affecting the ACF regulation, including ongoing legal and regulatory actions.

Regulations Related to Labor

Our U.S. employees are covered by the National Labor Relations Act of 1935, as amended (the “NLRA”). Under the NLRA, employees can unionize in small, localized groups, and government-led mediation is not a required step in the negotiation process.

The U.S. Congress has, in the past, considered adopting changes in labor laws that would make it easier for unions to organize units of our employees.

Our employees are also protected under the California Labor Code, which imposes various requirements on employers, including those related to wages, hours, working conditions, and workers’ compensation insurance. We are required to compensate our employees in a timely manner, provide mandated meal and rest periods, and comply with regulations governing minimum wages, working hours, and days of work. Noncompliance with these requirements may result in legal liability. As required by the State of California Department of Industrial Relations, we are required to post information related to wages, hours and working conditions in an area frequented by employees where it may be easily read during the workday.

Additionally, we are subject to the California Occupational Safety and Health Act of 1973, which mandates that we maintain a safe and healthful working environment for all employees. We are required to provide a workplace that meets applicable safety and health standards. Failure by our company, our management, or supervisors to comply with these obligations may result in penalties, fines, or other liabilities.

We are subject to numerous federal, state and local laws and regulations governing employee health and safety. Compliance with changing laws and regulations from time to time could result in materially increased operating costs and capital expenditures, and negatively impact our ability to attract and retain employees.

Available Information

We make our Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K and amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), available free of charge on our website as soon as reasonably practicable after such materials are filed with or furnished to the Securities and Exchange Commission (“SEC”). To obtain any of this information, go to our investor relations website, https://www.eliteexpressholding.com, and select “SEC Filings”.