Proficient Auto Logistics, Inc. Common Stock (PAL) S-1IPO registration

The information in this prospectus is not complete and may be changed. We may not sell these securities until the registration statement filed with the Securities and Exchange Commission is effective. This prospectus is not an offer to sell these securities and it is not soliciting an offer to buy these securities in any jurisdiction where the offer or sale is not permitted.

Subject to completion, dated April 11, 2024

            Shares

Proficient Auto Logistics, Inc.

Common Stock

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This is the initial public offering of shares of common stock of Proficient Auto Logistics, Inc. We are selling            shares of our common stock.

Prior to this offering, there has been no public market for our common stock. It is currently estimated that the initial public offering price per share will be between $            and $            . We intend to apply to list our common stock on the Nasdaq Global Market, subject to notice of official issuance, under the symbol “PAL.”

We are an “emerging growth company” under applicable Securities and Exchange Commission rules and will be subject to reduced public company reporting requirements.

Investing in our common stock involves substantial risks. See “Risk Factors” beginning on page 13 to read about factors you should consider before buying shares of stock.

Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or determined if this prospectus is truthful or complete. Any representation to the contrary is a criminal offense.

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(1)      See “Underwriting” for a description of compensation payable to the underwriters.

We have granted the underwriters a 30-day option to purchase up to an additional __________shares of common stock from us at the initial public offering price, less the underwriting discount.

The underwriters expect to deliver the shares of common stock to purchasers on or about          , 2024.

The date of this prospectus is           , 2024.

TABLE OF CONTENTS

PROSPECTUS

Neither we nor the underwriters have authorized anyone to provide you any information or make any representations other than those contained in this prospectus or in any free writing prospectuses prepared by or on behalf of us or to which we have referred you. We and the underwriters take no responsibility for, and can provide no assurance as to the reliability of, any other information that others may give you. We and the underwriters are not making an offer to sell these securities in any jurisdiction where the offer or sale is not permitted. You should assume that the information appearing in this prospectus or in any applicable free writing prospectus is current only as of its date, regardless of its time of delivery or any sale of shares of our common stock. Our business, financial condition, results of operations and prospects may have changed since that date.

For investors outside of the United States, we have not, and the underwriters have not, done anything that would permit this offering or possession or distribution of this prospectus in any jurisdiction where action for that purpose is required, other than the United States. Persons outside of the United States who come into possession of this prospectus must inform themselves about, and observe any restrictions relating to, the offering of the shares of common stock and the distribution of this prospectus outside of the United States.

Prior to this offering, Proficient Auto Logistics, Inc. entered into agreements to acquire in multiple, separate acquisitions (the “Combinations”) five operating businesses and their respective affiliated entities, as applicable, operating under the following names: (i) Delta Automotive Services, Inc., doing business as Delta Auto Transport, Inc., (“Delta”), (ii) Deluxe Auto Carriers, Inc. (“Deluxe”), (iii) Sierra Mountain Group, Inc. (“Sierra”), (iv) Proficient Auto Transport, Inc. (“Proficient Transport”), and (v) Tribeca Automotive Inc. (“Tribeca” and, together with Delta, Deluxe, Sierra, and Proficient Transport, the “Founding Companies”). Proficient Auto Logistics, Inc. will not close the acquisition of any of the Founding Companies unless Proficient Auto Logistics, Inc. closes the acquisition of all the Founding Companies. Furthermore, the closing of the Combinations and this offering are conditioned on the closing of each other. Therefore, if we fail to close the Combinations, this offering will not close. Because of this structure, Proficient Auto Logistics, Inc. has not yet operated as a combined company and does not currently have a combined operating history. See “Business — Overview of Founding Companies” and “Certain Relationships and Related Person Transactions — The Combinations with the Founding Companies” for additional information.

Unless the context requires otherwise, references in this prospectus to “Proficient” refers solely to Proficient Auto Logistics, Inc. prior to the Combinations, and references to the “Company,” “we,” “us,” and “our” refer to Proficient Auto Logistics, Inc. and its subsidiaries after giving effect to the Combinations.

For accounting and reporting purposes, Proficient Transport has been identified as the designated accounting acquirer of each of the Founding Companies. Proficient Transport has been identified as the designated accounting predecessor to the Company.

RISK FACTORS

Investing in our common stock involves a high degree of risk. Before deciding to invest in shares of our common stock, you should carefully consider the risks described below, together with the other information contained in this prospectus, including in the section titled “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and in our audited financial statements and the related notes included elsewhere in this prospectus. We cannot assure you that any of the events discussed below will not occur. These events could adversely impact our business, financial condition, results of operations and prospects. If that were to happen, the trading price of our common stock could decline, and you could lose all or part of your investment.

Risks Related to Our Business and Operations

The Combinations and this offering are dependent upon each other. There can be no guarantee that the closing of the Combinations, and therefore this offering, will occur.

Prior to this offering, Proficient entered into agreements to combine with each of the Founding Companies. This offering is conditioned on the closing of the Combinations with each of the Founding Companies. Therefore, if we fail to close the Combinations, this offering will not close. There can be no assurance that all of the conditions precedent to the Combinations will be satisfied or waived, or, if satisfied or waived, when they will be satisfied or waived. Accordingly, there is no guarantee that the closing of the Combinations or this offering will occur.

We have not operated as a combined company, and we may not be able to successfully integrate the Founding Companies into one entity.

The Founding Companies have historically operated independently of one another. There can be no assurance that we will be able to integrate the operations of the Founding Companies successfully or institute the necessary systems and procedures, including accounting and financial reporting systems, to manage the combined enterprise on a profitable basis and report the results of operations of the combined entities on a timely basis. In addition, there can be no assurance that our recently assembled management team will be able to successfully manage the combined entity and effectively implement our operating or growth strategies. Our pro forma combined financial results cover periods during which we were not under common control or management and, therefore, may not be indicative of our future financial or operating results. Our success will depend on management’s ability to integrate the companies successfully.

Increased competition in the auto transportation and logistics industry could result in a loss of our market share or a reduction in our rates, which could have a material adverse effect on our operations.

The auto transportation and logistics market is a highly competitive and fragmented industry. We currently compete with other auto carriers of varying sizes, logistics, brokerage and transportation services providers of varying sizes, as well as with railroads and independent owner-operators. Competition for the freight we transport or manage is based primarily on service, efficiency, available capacity and, to some degree, on freight rates alone. Our competitors periodically reduce their freight rates to gain business, especially when economic conditions are present, which negatively impact customer shipping volumes, truck capacities, or operating costs. In addition, certain of the Company’s customers may develop new methods for hauling vehicles, such as using local drive-away services to facilitate local delivery of products. Railroads, which specialize in long-haul transportation, may be able to provide delivery services at costs to customers that are less than the long-haul delivery cost of our services. Additionally, the continuing trend toward consolidation in the trucking industry may result in more large carriers with greater financial resources, and the development of new methods or technologies for hauling vehicles could lead to increased investments to remain competitive, either of which may lead to new market entrants and increased competition overall. If we lose market share to these competitors or have to reduce our rates in order to retain our market share, our financial condition and results of operations could be materially and adversely affected.

We are highly dependent on the automotive industry and a decline in the automotive industry could have a material adverse effect on our operations.

The automotive transportation market in which we operate is dependent upon the volume of new automobiles, sport utility vehicles (“SUVs”), and light trucks manufactured, imported and sold by the automotive industry in the United States, Canada, and Mexico. The automotive industry is highly cyclical, and the demand for new automobiles, SUVs and light trucks is directly affected by such external factors as general economic conditions in the

United States, Canada and Mexico, unemployment rates, labor shortages or strikes, consumer confidence, government policies, continuing activities of war, terrorist activities and the availability of affordable new car financing. As a result, our results of operations could be adversely affected by downturns in the general economy and in the automotive industry, and by changing consumer preferences in purchasing new automobiles, SUVs and light trucks or the overall financial condition of our major customers. A significant decline in the volume of automobiles, SUVs and light trucks manufactured, imported and sold in the United States could have a material adverse effect on our operations.

We are dependent on a small number of customers for a large portion of our revenue.

Historically, a select group of our customers have made up a majority of our revenue. Specifically, for the year ended December 31, 2023, our top five customers accounted for 59.6% of our combined total operating revenue and our top ten customers accounted for 84.3% of our combined total operating revenue. General Motors Company accounted for 25.6% of our combined total operating revenue, Stellantis N.V. accounted for 8.9% of our combined total operating revenue, BMW accounted for 8.9% of our combined total operating revenue, Mercedes Benz accounted for 8.4% of our combined total operating revenue and Toyota accounted for 7.8% of our combined total operating revenue for the year ended December 31, 2023. There is no assurance any of our customers, including this select group of customers, will continue to utilize our services, renew our existing contracts, or continue at the same volume levels. Despite the existence of contractual arrangements, certain of our customers may engage in competitive bidding processes that could negatively impact our contractual relationships. A loss of any of these customers would have a material adverse effect on the Company’s results of operations and financial condition.

Our business depends upon compliance with numerous government regulations.

Our operations are regulated and licensed by various federal, state, and local transportation agencies in the United States. We are subject to licensing and regulation by the U.S. Department of Transportation (the “DOT”) for the transportation of property. The DOT prescribes qualifications for acting in this capacity, including certain surety bonding requirements. We also have and maintain other licenses as required by law. In addition to the DOT, various federal and state agencies exercise broad regulatory powers over the transportation industry, generally governing such activities as operations of and authorization to engage in motor carrier freight transportation, safety, contract compliance, insurance requirements, tariff and trade policies, taxation, and financial reporting.

We are audited periodically by the DOT to ensure that we are in compliance with various safety, hours-of-service, and other rules and regulations. If we were found to be out of compliance or receive an unsatisfactory DOT safety rating, the DOT could restrict or otherwise materially adversely impact our business, financial conditions and results of operations.

We could become subject to new or more restrictive regulations, such as regulations relating to U.S. Environmental Protection Agency mandated engine emissions requirements, drivers’ hours of service, occupational safety and health, ergonomics, cargo security, collective bargaining, and other matters affecting safety or operating methods. Our drivers also must comply with the safety and fitness regulations promulgated by the DOT, including those relating to drug and alcohol testing and hours of service. Compliance with all such regulations could substantially require changes in our operating practices, influence the demand for auto transportation and logistics services, reduce equipment and driver productivity and our load factor, and the costs of compliance could incur significant additional expenses.

Any such change in an applicable regulation or ruling in a judicial proceeding could have a material adverse effect on our business. See “Business — Government Regulation and Environmental Matters.”

We cannot predict the impact that future regulations may have on our business. Our failure to maintain required permits or licenses, or to comply with applicable regulations, could result in substantial fines or revocation of our operating permits and licenses.

Our engagement of owner-operators to provide a portion of our capacity exposes us to different risks than we face with our company drivers.

We face a complex and increasingly stringent regulatory and statutory scheme relating to wages, classification of employees and alternate work arrangements. Tax and other regulatory authorities, as well as owner-operators themselves, have increasingly asserted that owner-operators within our industry are employees, rather than independent contractors. Automotive transportation companies have been, and may continue to be, subject to lawsuits alleging that

their drivers were misclassified as independent contractors rather than employees. Further, class actions and other lawsuits have been filed against us and others in our industry seeking to reclassify owner-operators as employees for a variety of purposes, including workers’ compensation and health care coverage. If any such cases are judicially determined in a manner adverse to us or our businesses, there could be an adverse impact on our operations in the effected jurisdictions. Taxing and other regulatory authorities and courts apply a variety of standards in their determination of independent contractor status. If the owner-operators we contract with are deemed employees, we could incur additional exposure under laws for federal and state tax, workers’ compensation, unemployment benefits, labor, employment and tort. The exposure could include prior period compensation, as well as potential liability for employee benefits and tax withholdings. For example, Sierra and Deluxe, in 2022 and 2020, respectively, reclassified their owner-operators in California as sub-haulers and employees, as appropriate. While the entities experienced increased expenses associated with additional employees, the reclassification did not impact revenue recognition. We continue to evaluate the classification of drivers to ensure compliance with all relevant laws. While we continue to engage owner-operators where permissible and do not believe any future reclassifications would be material, we cannot guarantee an immaterial impact. Any such change in applicable regulation or ruling in a judicial proceeding could have a material adverse effect on our business. See “Business — Government Regulation and Environmental Matters.”

In addition, our lease contracts with owner-operators are governed by federal leasing regulators, which impose specific requirements on us and owner-operators retained by us. Litigation alleging violations of lease agreements or contractual terms could result in adverse decisions against us.

There has been no independent valuation of the Founding Companies to support the consideration that we agreed to pay, which means the Founding Companies may be worth less than the purchase price.

The consideration payable for the Founding Companies has been determined by Proficient without independent valuations, appraisals or fairness opinions. In determining and negotiating the consideration to be paid in the Combinations to each of the individual Founding Companies, Proficient relied on the experience and judgment of its founders, Ross Berner and Mark McKinney, who leveraged their 20 years of experience in investing in public securities across multiple industries, including transportation and logistics companies. Their evaluation considered a variety of metrics, including a review of enterprise value/EBITDA, enterprise value/EBITDA-capex, free cash flow multiples and sustainability of revenues and operating margins. Despite the detailed evaluation led by Messrs. Berner and McKinney, this valuation is still subjective. Thus, the Founding Companies may have a value that is lower than the agreed upon consideration.

We may be adversely impacted by fluctuations in the price and availability of fuel and our ability to collect fuel surcharges.

We must purchase large quantities of fuel to operate our business, which is a significant operating expense. The price and availability of fuel can be highly volatile and can be impacted by factors beyond our control, such as natural disasters, adverse weather conditions, political events or international conflicts, price and supply decisions by oil producing countries, or changes to trade agreements. An increase in fuel prices or diesel fuel taxes, or any change in federal or state regulations that results in such an increase, could have an adverse effect on our operating results.

We typically are able to pass through a portion of our fuel costs to our customers. Changes in fuel costs will not result in a direct offset to fuel surcharges due to the nature of the calculation of fuel surcharges, which is customer-specific and fluctuates as a result of miles driven, changes in the number and types of units hauled per customer, as well as the relationship of the national average cost of fuel (the national average diesel price index) or other contractually determined customer index benchmarks compared to actual fuel prices paid at the pump. In addition, depending on the base rate and fuel surcharge levels agreed upon by our customers, there could be a delay in reflecting increases in our surcharges to customers resulting from a rapid and significant change in the cost of diesel fuel, which could also have a material adverse effect on our operating results.

We may not be able to secure additional financing on favorable terms, or at all, to meet our future capital needs.

We require substantial amounts of cash to cover operating expenses as well as to fund capital expenditures, working capital changes, principal and interest payments on debt obligations, lease payments and tax payments. In the future, we may require additional capital to cover such expenses. Any debt financing obtained by us in the future may contain, certain restrictive covenants that limit our ability, among other things, to engage in certain activities that are in our long-term best interests, including our ability to:

•        incur additional indebtedness;

•        incur certain liens;

•        consolidate, merge or sell or otherwise dispose of our assets;

•        make investments, loans, advances, guarantees and acquisitions;

•        enter into swap agreements;

•        redeem, repurchase or refinance our other indebtedness; and

•        amend or modify our governing documents.

Such covenants may make it more difficult for us to operate our business, obtain additional capital and pursue business opportunities, including potential acquisitions. If we are unable to obtain adequate financing or financing on terms satisfactory to us, when we require it, our ability to continue to grow or support our business and respond to business challenges could be significantly limited.

Our operations expose us to potential environmental liabilities.

Our operations are subject to a number of federal, state and local laws and regulations relating to the storage of petroleum products and hazardous materials, as well as safety regulations relating to the upkeep and maintenance of our vehicles. In particular, our operations are subject to federal, state and local laws and regulations governing leakage from salvage vehicles, waste disposal, the handling of hazardous substances, environmental protection, remediation, workplace exposure and other matters. It is possible that an environmental claim could be made against us or any of the Founding Companies or that one or more of them could be identified by the Environmental Protection Agency, a state agency or one or more third parties as a potentially responsible party under federal or state environmental laws. If we or any of the Founding Companies were to be named a potentially responsible party, we could be forced to incur substantial investigation, legal and remediation costs, which could have a material adverse effect on our business, financial condition and results of operations. See “Business — Government Regulation and Environmental Matters.”

We may be adversely impacted by work stoppages and other labor matters.

A substantial number of the employees of our largest customers are members of trade unions and are employed under the terms of collective bargaining agreements. During 2023, labor strikes by the United Auto Workers of its employees at certain facilities of Ford, General Motors and Stellantis caused a 45-day shutdown of the affected manufacturing operations. While the limited scope and duration of this strike did not have a material adverse effect on our revenues or profitability, future work stoppages at our automotive customers or their suppliers could negatively impact our revenues and profitability.

Any unionization efforts or labor regulation changes in certain jurisdictions in which we operate could divert management’s attention and could have a materially adverse effect on our operating results or limit our operational flexibility.

We consider our relationship with our employees to be satisfactory, and none of our employees are represented by a union in collective bargaining with us. However, efforts could be made by employees and third parties from time to time to unionize portions of our workforce. Any unionization efforts, collective bargaining agreements or work stoppages could have a materially adverse effect on our operating results or limit our operational flexibility.

Sustained periods of severe abnormal weather can have a material adverse effect on our business.

Certain weather conditions can disrupt our operations, which will negatively affect revenues on a particular business day that may not be recouped in the future. Inefficiencies in our loading, unloading and transit times associated with cleaning snow off of our rigs before use and cleaning snow off of vehicles being transported before and after transporting them, increased lodging costs due to hours of service restrictions for our drivers and premium (overtime) pay required in order to complete the unit movements over weekends to make up for the inefficiencies caused by delayed delivery of on-ground customer inventories may also have a negative impact on earnings.

There can be no assurance that we will continue to manage our business effectively when influenced by severe weather events or that severe weather events will not have a material adverse effect on our business, financial condition and results of operations.

Our growth strategy includes acquisitions, diversification into new specialty transportation businesses and expansion into new geographic markets. We are subject to various risks in pursuing this growth strategy and we may have difficulty in integrating businesses we acquire and may be subject to unexpected liabilities.

Our business strategy includes a growth strategy in-part dependent on acquisitions, diversification into specialty transportation businesses and expansion into new geographic markets.

However, we may not be able to identify suitable acquisition candidates in the future, and we may never realize expected business opportunities and growth prospects from acquisitions. Acquisitions involve numerous risks, including, but not limited to: difficulties in integrating the operations, technologies and products acquired; the diversion of our management’s attention from other business concerns; current operating and financial systems and controls may be inadequate to deal with our growth; and the risks of entering markets in which we have limited or no prior experience and the loss of key employees. Furthermore, even if we are able to identify attractive acquisition candidates, we may not be able to obtain the financing to complete such acquisitions.

If these factors limit our ability to integrate the operations of our acquisitions, successfully or on a timely basis, our expectations of future results of operations may not be met. In addition, our growth and operating strategies for any business we acquire may be different from the strategies that such business currently is pursuing. If our strategies are not the appropriate strategies for a company we acquire, it could have a material adverse effect on our business, financial condition and results of operations. Further, there can be no assurance that we will be able to maintain or enhance the profitability of any acquired business or consolidate the operations of any acquired business to achieve cost savings.

Furthermore, there may be liabilities that we do not discover in the course of performing due diligence investigations on each company or business we have already acquired or may acquire in the future. Such liabilities could include those arising from employee benefits contribution obligations of a prior owner or noncompliance with, or liability pursuant to, applicable federal, state or local environmental requirements by prior owners for which we, as a successor owner, may be responsible. In addition, there may be additional costs relating to acquisitions including, but not limited to, possible purchase price adjustments. Rights to indemnification by sellers of assets to us, even if obtained, may not be enforceable, collectible or sufficient in amount, scope or duration to fully offset the possible liabilities associated with the business or property acquired. Any such liabilities, individually or in the aggregate, could have a material adverse effect on our business.

We currently intend to finance future acquisitions by using a combination of common stock, cash and debt. To the extent we issue shares of common stock to finance future acquisitions, the interests of existing stockholders will be diluted. If the common stock does not maintain a sufficient market value, or if potential acquisition candidates are unwilling to accept common stock as part of the consideration for the sale of their businesses, we may be required to utilize more of our cash resources, if available, in order to pursue our acquisition program. Upon consummation of the offering and application of the proceeds therefrom, we expect to have $        million of net proceeds remaining for future acquisitions and working capital. See “Use of Proceeds.” If we do not have sufficient cash resources, our growth could be limited unless we are able to obtain additional capital through debt or equity financings. There can be no assurance that we will be able to obtain the financing we will need for our acquisition program on acceptable terms, or at all. See “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Proficient Auto Transport, Inc. — Liquidity and Capital Resources.”

We currently generate most of our revenue from the transportation of vehicles. However, we may grow our business by diversifying and entering into new specialty transportation businesses. To the extent we enter into such businesses, we will face numerous risks and uncertainties, including risks associated with the possibility that we have insufficient expertise to engage in such activities profitably or without incurring inappropriate amounts of risk, the required investment of capital and other resources and the loss of existing clients due to the perception that we are no longer focusing on our core business. Entry into certain new specialty transportation businesses may also subject us to new laws and regulations with which we are not familiar, or from which we are currently exempt, and may lead to increased litigation and regulatory risk. If a new specialty transportation business generates insufficient revenue or if we are unable to efficiently manage our expanded operations, our results of operations could be materially adversely affected.

Technological advances are facilitating the development of driverless vehicles, which may materially harm our business.

Driverless vehicles are being developed for the transportation and automotive industries that, if widely adopted, may materially harm our business. The eventual timing of availability of driverless vehicles is uncertain due to regulatory requirements, additional technological requirements, and uncertain consumer acceptance of these vehicles. The effect of driverless vehicles on the transportation and automotive industries is uncertain and could include changes in the level of new and used vehicles sales, the price of new vehicles, and the demand for our services, any of which could materially and adversely affect our business.

Because we have not operated as a combined company, we do not have a long-term reputation of success.

As we have not operated as a combined company, we do not have the long-term reputation of success that other well-established companies have. Particularly in the transportation market, in which trust is important, the absence of a proven reputation could make it more difficult to establish new customers. As a result, we will rely more heavily on the brand value and reputation of the individual Founding Companies.

The transportation infrastructure continues to be a target of terrorists.

Because transportation assets continue to be a target of terrorists, governments around the world are adopting or are considering adopting stricter security requirements that will increase operating costs and potentially slow service for businesses, including those in the transportation industry. These security requirements are not static, but change periodically as the result of regulatory and legislative requirements, imposing additional security costs and creating a level of uncertainty for our operations.

Ongoing insurance and claims expenses could result in significant expenditures and reduce and cause volatility in our earnings.

We, by the nature of our operations, are exposed to the potential for a variety of claims, including personal injury claims, vehicular collisions and accidents, alleged violations of federal and state labor and employment laws, such as class-action lawsuits alleging wage and hour violations and improper pay, commercial and contract disputes, cargo loss and property damage claims. Each of the Founding Companies has maintained, and we expect to maintain, insurance coverage with established insurance companies at levels they or we deem adequate. The trucking business has experienced significant increases in the cost of liability insurance, in the size of jury verdicts in personal injury cases arising from trucking accidents and in the cost of settling such claims. If the number or severity of future claims continues to increase, claims expenses might exceed historical levels or could exceed the amounts of our insurance coverage or the amount of our reserves for self-insured claims or deductible levels, which could materially adversely affect our financial condition, results of operations, liquidity and cash flows.

In recent years, several insurance companies have completely stopped offering coverage to trucking companies or have significantly reduced the amount of coverage they offer or have significantly raised premiums as a result of increases in the severity of automobile liability claims and sharply higher costs of settlements and verdicts. To the extent that the third-party insurance companies propose increases to their premiums for coverage of commercial trucking claims, we may decide to pay such increased premiums or increase our financial exposure on an aggregate or per occurrence basis, including by increasing the amount of its self-insured retention or reducing the amount of

total coverage. This trend could adversely affect our ability to obtain suitable insurance coverage, could significantly increase our cost for obtaining such coverage, or could subject us to significant liabilities for which no insurance coverage is in place, which could materially adversely affect our financial condition, results of operations, liquidity and cash flows.

Our self-insured retention limits can make our insurance and claims expense higher and/or more volatile. We accrue for the estimated costs of the uninsured portion of pending claims based on the nature and severity of individual claims and historical claims development trends. Estimating the number and severity of claims, as well as related judgment or settlement amounts is inherently difficult. This, along with legal expenses associated with claims, incurred but not reported claims, and other uncertainties can cause unfavorable differences between actual self-insurance costs and our reserve estimates.

In addition, any accident or incident for which we are liable, even if fully insured, could negatively affect our standing with our customers and the public, thereby making it more difficult for us to compete effectively, and could significantly impact the cost and availability of adequate insurance in the future.

Increases in driving associate compensation or difficulties attracting and retaining qualified driving associates could have a materially adverse effect on our profitability and the ability to maintain or grow our fleet.

Difficulty in attracting and retaining sufficient numbers of qualified driving associates, independent contractors, and third-party capacity providers, could have a materially adverse effect on our growth and profitability. The transportation industries are subject to a shortage of qualified driving associates. Such shortage is exacerbated during periods of economic expansion, in which there may be alternative employment opportunities, or during periods of economic downturns, in which unemployment benefits might be extended and financing is limited for independent contractors who seek to purchase equipment or for students who seek financial aid for driving school. Furthermore, capacity at driving schools may be limited by other future outbreaks similar to COVID-19 and any governmental imposed lockdown or other attempts to reduce the spread of such an outbreak may reduce the pool of potential drivers available to us. Regulatory requirements could further reduce the number of eligible driving associates. Our inability to engage a sufficient number of driving associates and independent contractors may negatively affect our operations. Further, our driving associate compensation and independent contractor expenses are subject to market conditions, and we may find it necessary to increase driving associate and independent contractor rates in future periods.

In connection with the preparation of the financial statements, a material weakness in Proficient Transport’s internal controls over financial reporting was identified and, if our remediation is not effective, or if we fail to maintain an effective system of internal controls over financial reporting in the future, we may not be able to accurately or timely report our financial condition or results of operations, which may adversely affect investor confidence and profitability.

We have identified a material weakness in one of the Founding Company’s internal controls over financial reporting. A material weakness is a deficiency, or a combination of deficiencies, in internal controls over financial reporting, such that there is a reasonable possibility that a material misstatement of our annual or interim financial statements will not be prevented or detected on a timely basis. The material weakness identified was related to IT general controls in Proficient Transport’s financial systems.

Remediation steps are being taken designed to improve Proficient Transport’s internal controls over financial reporting to address the underlying causes, including: designing and implementing increased controls, increased oversight and review of technical systems and engaging third-parties. We continue to work on other remediation initiatives.

While we believe that these efforts will improve Proficient Transport’s internal controls over financial reporting, the implementation of these measures is ongoing and will require validation and testing of the design and operating effectiveness of internal controls over a sustained period of financial reporting cycles. If the steps we take do not remediate the material weaknesses in a timely manner, there could continue to be a reasonable possibility that these control deficiencies or others could result in a material misstatement of our annual or interim financial statements that would not be prevented or detected on a timely basis. If we are unable to successfully remediate our existing or any future material weakness, the accuracy of our financial reporting may be adversely affected, which could cause investors to lose confidence in our financial reporting and our share price and profitability may decline as a result.

Increased prices for new equipment, trucks and their parts, and the decreased availability of new equipment or the failure of manufacturers to meet their sale obligations could have a materially adverse effect on our business, profitability and operations.

The Founding Companies have been subject to risk with respect to increased prices for new trucking equipment and decreased vendor output. Any decrease in vendor or manufacturer output could have an adverse effect on our ability to sustain our desired growth rate and maintain our trucking fleet.

We are sensitive to the used equipment market and fluctuations in prices and demand for trucking equipment. The market for used equipment is affected by several factors, including the demand for freight, the supply of new and used equipment, the availability and terms of financing, the presence of buyers for export to foreign countries, and commodity prices for scrap metal. We have seen a softening of the used equipment market recently.

Higher costs for or limited availability of appropriate real estate may adversely affect our business operations.

Each of the Founding Companies is reliant on the cost and availability of service centers in strategic areas. The costs to purchase, lease, or build these service centers has recently increased as a result of inflation, increased interest rates, changes in supply chains, increased costs for raw materials and labor, and increased demand for supplies. Shortages in the availability of real estate in these key strategic areas or delays in obtaining the requisite permits could result in additional costs to purchase, build, or renovate service centers. This could restrict our ability to grow in our existing markets, expand nationally, or efficiently serve our current markets.

We believe the geographic footprint of the Founding Companies’ existing service centers is sufficient to support our operations upon closing of the Combinations, as the Company was intentionally structured to acquire Founding Companies that were already well supported by service centers. While the structure of the Company combats risks associated with inflation, there can be no guarantee that we will not face similar risks in the future if our operations require new service centers or repairs to or expansions of our service centers or if we must renegotiate our service centers’ leases. Notably, Proficient Transport has historically limited the effects of inflation on its business through increases in freight rates and certain cost control efforts, and we expect to do the same following the Combinations. If we are unable to offset the effects of inflation on our business, our results of operations could be harmed.

Our success depends in part on the contributions of our executives and managers, including those who were employees of the Founding Companies.

We are highly dependent upon our senior management team. In particular, the loss of the services of Richard O’Dell or Brad Wright could have a material adverse effect on our business, financial condition and results of operations. We do not presently maintain “key man” life insurance with respect to members of senior management. In addition, our operating facilities are managed by regional and local managers who have an average of 15 years of auto transportation and logistics experience and substantial knowledge of the local markets served, including former owners and employees of the Founding Companies. Insofar as the Founding Companies’ stockholders will receive a significant portion of the purchase price in shares of common stock, our ability to retain their services may depend, in part, on the common stock maintaining a sufficiently high market price. We believe these employees’ knowledge of the industry and our business model, coupled with their invaluable relationships with customers and vendors, may be highly difficult to replicate. The loss of one or more of these managers may have a material adverse effect on our business, financial condition and results of operations in the event that we are unable to find a suitable replacement in a timely manner.

The timely, professional and dependable service required by auto transportation and logistics customers requires an adequate supply of skilled dispatchers, drivers and support personnel. Accordingly, our success will depend on our ability to employ, train and retain the personnel necessary to meet our service requirements. From time to time, and in particular areas, there are shortages of skilled personnel, and there can be no assurance that we will be able to maintain an adequate skilled labor force necessary to operate efficiently, that our labor expenses will not increase as a result of a shortage in the supply of skilled personnel or that we will not have to curtail our planned growth as a result of labor shortages.

We will need to build or acquire integrated information technology systems and our business may be seriously harmed if we fail to maintain, upgrade, enhance, protect, and integrate our information technology systems.

Each of the Founding Companies is currently using separate accounting, financial and dispatch systems. We are beginning the process of selecting and implementing systems that will enable us to centralize our accounting and financial reporting activities at our headquarters in Jacksonville, Florida. In addition, we intend to have all the

Founding Companies utilize the same licensed, national dispatch system for their transport operations. We anticipate that we will need to upgrade and expand our information technology systems on an ongoing basis as we expand our operations and complete acquisitions. There can be no assurance that we will not encounter unexpected delays and costs in connection with implementing such systems or that such systems when installed will function in accordance with our expectations. See “Business — Dispatch and Information Systems.”

We must ensure that our information technology systems remain competitive. If our systems are unable to maintain high volumes with reliability, accuracy and speed as the information technology systems are centralized and we continue to grow, our service levels and operating efficiencies may decline. Additionally, if we fail to enhance our systems to meet customer needs, our results of operations could be harmed.

Operational risks, including the risk of cyberattacks, may disrupt our business, result in losses or limit our growth.

We rely heavily on our financial, accounting, treasury, communications and other data processing systems and a continued and efficient operation of such systems. Such systems may fail to operate properly or become disabled because of tampering or a breach of the network security systems or otherwise. In addition, such systems are from time to time subject to cyberattacks which may continue to increase in sophistication and frequency in the future.

Cyber security incidents and cyber-attacks have been occurring globally at a more frequent and severe level and will likely continue to increase in frequency in the future. Our information and technology systems may be vulnerable to damage or interruption from cyber security breaches, computer viruses or other malicious code, network failures, computer and telecommunication failures, infiltration by unauthorized persons and other security breaches, usage errors by their respective professionals or service providers, power, communications or other service outages and catastrophic events such as fires, tornadoes, floods, hurricanes and earthquakes. Cyberattacks and other security threats could originate from a wide variety of sources, including cyber criminals, nation state hackers, hacktivists and other outside parties. If successful, these types of attacks on our network or other systems could have a material adverse effect on our business and results of operations, due to, among other things, the loss of proprietary data, interruptions or delays in the operation of our business and damage to our reputation. There can be no assurance that measures we take to evaluate the integrity of our systems will provide protection, especially because cyberattack techniques used change frequently or are not recognized until successful.

Our risk management systems could prove to be inadequate and, if compromised, could become inoperable for extended periods of time, cease to function properly or fail to adequately secure private information. We do not control the cyber security plans and systems put in place by third-party service providers, and such third-party service providers may have limited indemnification obligations to us. Breaches such as those involving covertly introduced malware, impersonation of authorized users and industrial or other espionage may not be identified even with sophisticated prevention and detection systems, potentially resulting in further harm and preventing them from being addressed appropriately. The failure of these systems or of disaster recovery plans for any reason could cause significant interruptions in our operations and result in a failure to maintain the security, confidentiality or privacy of sensitive data, including personal information relating to stockholders and material nonpublic information. We could be required to make a significant investment to remedy the effects of any such failures, harm to our reputations, legal claims we may be subjected to, regulatory action or enforcement arising out of applicable privacy and other laws, adverse publicity and other events that may affect our business and financial performance.

Our contractual agreements with our owner-operators expose us to risks that we do not face with company drivers.

Our reliance on independent owner-operators creates numerous risks for our business. For example, if our independent owner-operators fail to meet our contractual obligations or otherwise fail to perform in a manner consistent with our requirements, we may be required to utilize alternative service providers at potentially higher prices or with some degree of disruption of the services that we provide to customers. If we fail to deliver on time, if the contractual obligations are not otherwise met, or if the costs of our services increase, then our profitability and customer relationships could be harmed.

Owner-operators are third-party service providers, as compared to company drivers who are employed by us. As independent business owners, our owner-operators may make business or personal decisions that conflict with our best interests. For example, if a load is unprofitable, route distance is too far from home or personal scheduling conflicts

arise, an owner-operator may deny loads of freight from time to time. In these circumstances, we must be able to timely deliver the freight in order to maintain relationships with customers. In addition, adverse changes in the financial condition of our independent contractor owner-operators or increases in their equipment or operating costs could cause them to seek higher revenues. The prices we charge our customers could be impacted by such issues, which may in turn limit pricing flexibility with customers.

We are directly affected by the state of the global economy and geopolitical developments.

While macroeconomic risks apply to most companies, we are particularly vulnerable. The transportation industry is susceptible to trends in economic activity. As our business is to transport automobiles, so our business levels are directly tied to the purchase and production of goods and the rate of growth of global trade — key macroeconomic measurements influenced by, among other things, inflation and deflation, supply chain disruptions (including, but not limited to the worldwide semiconductor shortage), interest rates and currency exchange rates, labor costs and unemployment rates, labor shortages or strikes, fuel and energy prices, public health crises, inventory levels, buying patterns and disposable income, debt levels, and credit availability.

Our quarterly results may fluctuate significantly and may not fully reflect the underlying performance of our business.

We expect to experience significant fluctuations in quarterly operating results due to a number of factors, including the timing of auto production and sales and acquisitions and related costs; our success in integrating acquired companies; the loss of significant customers or contracts; the timing of expenditures for new equipment and the disposition of used equipment; price changes in response to competitive factors; and general economic conditions. As a result of these fluctuations, results for any one quarter should not be relied upon as being indicative of performance in future quarters.

Our business and operating results are subject to seasonal fluctuations, which could result in fluctuations in our operating results and stock price.

The provision of auto transportation and logistics services is subject to seasonal variations. Specifically, there are times when auto manufacturing plants have maintenance time off which impacts the auto delivery cycle. Auto transportation and logistics tends to be strongest in the months with the mildest weather because inclement weather tends to slow the delivery of vehicles.

Our existing stockholders and management will have significant control over stockholder matters.

Following consummation of the Combinations and this offering, the executive officers and directors (including persons who have agreed to serve as directors) and the former stockholders of the Founding Companies, including their respective affiliates, will beneficially own approximately      %, of our outstanding common stock (      % if the underwriters’ over-allotment option is exercised in full). Accordingly, these persons, if acting in concert, will hold sufficient voting power to enable them to significantly influence the election of all of the directors and the outcome of all issues submitted to a vote of our stockholders. Such concentration of ownership may have the effect of delaying, deferring or preventing a change in control of the Company, including transactions in which the holders of common stock might receive a premium for their shares over prevailing market prices. See “Principal Stockholders.”

A substantial portion of the proceeds of this Offering will be payable to affiliates.

Of the net proceeds of this offering, approximately $        million will be used to pay the cash portion of the Combinations consideration payable to the equity holders of the Founding Companies and approximately $        will be used to pay expenses incurred in connection with the Combinations. In addition, certain owners of the Founding Companies have guaranteed obligations of the respective Founding Companies. We intend to obtain the release of these guarantees as soon as practicable following consummation of this offering. See “Use of Proceeds” and “Certain Relationships and Related Person Transactions.”

Risks Related to this Offering, the Securities Markets and Ownership of Our Common Stock

An active and liquid trading market for our common stock may not develop and you may not be able to resell your shares of common stock at or above the public offering price, if at all.

Prior to this offering, no market for shares of our common stock existed. We intend to apply to list our common stock on the Nasdaq Global Market, subject to notice of official issuance, under the symbol “PAL.” Assuming that our common stock is listed, and after the consummation of this offering, an active or liquid trading market for our common stock may never develop or be sustained following this offering. To the extent certain of our existing stockholders and their affiliated entities participate in this offering, such purchases would reduce the non-affiliated public float of our shares, meaning the number of shares of our common stock that are not held by officers, directors and affiliated stockholders. A reduction in the public float could reduce the number of shares that are available to be traded at any given time, thereby adversely impacting the liquidity of our common stock and depressing the price at which you may be able to sell your shares. Moreover, the initial public offering price for our common stock will be determined through negotiations with the underwriters and may vary from the market price of our common stock following this offering. As a result of these and other factors, you may be unable to resell your shares of our common stock at or above the initial public offering price, at the time you wish to sell them, or at a price that you consider reasonable. The lack of an active market may also reduce the fair market value of your shares. Furthermore, an inactive market may also impair our ability to raise capital by selling shares of our common stock in the future and may impair our ability to enter into strategic collaborations or acquire companies by using our shares of common stock as consideration.

Our stock price may be volatile, which could result in substantial losses for investors purchasing shares in this offering.

The market price of our common stock is likely to be volatile and could fluctuate widely in response to many factors, some of which are beyond our control. These fluctuations could cause you to lose all or part of your investment in our common stock since you might be unable to sell your shares at or above the price you paid in this offering. The following factors, in addition to other factors described in this “Risk Factors” section and included elsewhere in this prospectus, may have a significant impact on the market price of our common stock:

•        volatility and instability in the financial and capital markets;

•        our operating and financial performance, quarterly or annual earnings relative to similar companies;

•        announcements by competitors that impact our competitive outlook;

•        publication of news stories about us, our competitors or our industry;

•        the public’s reaction to our press releases, our other public announcements and our filings with the U.S. Securities and Exchange Commission (the “SEC”);

•        announcements relating to strategic transactions, including acquisitions, collaborations, or similar arrangements;

•        sales of our common stock by us, our insiders, or other stockholders, or issuances by us of shares of our common stock in connection with strategic transactions;

•        regulatory developments or legal developments;

•        litigation or arbitration;

•        changes in accounting standards, policies, guidance, interpretations or principles;

•        general economic, political and market conditions and other factors; and

•        the occurrence of any of the risks described in this section titled “Risk Factors.”

If securities or industry analysts do not publish research or reports about our business, or if they publish inaccurate or unfavorable research about our business, our stock price and trading volume could decline.

The trading market for our common stock will be influenced in part by the research and reports that industry or securities analysts publish about us or our business. We do not have any control over the industry or securities analysts, or the content and opinions included in their reports and may never obtain research coverage by securities and industry

analysts. If no or few securities or industry analysts commence coverage of us, or if analysts cease coverage of us, we could lose visibility in the financial markets, and the trading price for our common stock could be impacted negatively. If any of the analysts who cover us publish inaccurate or unfavorable research or opinions regarding us, our business model, or our stock performance, our stock price would likely decline.

You will experience immediate and substantial dilution as a result of this offering and may experience additional dilution in the future.

You will suffer immediate and substantial dilution with respect to the common stock you purchase in this offering. Specifically, assuming an initial public offering price of $        per share, which is the midpoint of the estimated price range set forth on the cover page of this prospectus, and assuming that the number of shares offered by us, as set forth on the cover page of this prospectus, remains the same you will incur immediate dilution of $        per share. That number represents the difference between the assumed initial public offering price of $        per share and our pro forma net tangible book value per share of $        as of        . In addition, if the underwriters exercise their option to purchase additional shares from us, or if we issue additional equity securities in the future, investors purchasing shares of common stock in this offering will experience additional dilution.

For a further description of the dilution you will experience immediately after this offering, see the section titled “Dilution.”

Sales of a substantial number of our shares of common stock in the public market could cause our stock price to fall.

Our common stock price could decline as a result of sales of a large number of shares of common stock after this offering or the perception that these sales could occur. These sales, or the possibility that these sales may occur, might also make it more difficult for us to sell equity securities in the future at a time and price that we deem appropriate.

Upon the completion of this offering,             shares of common stock will be outstanding (        shares if the underwriters exercise their option to purchase additional shares from us in full), based on the number of shares outstanding as of December 31, 2023.

All shares of common stock expected to be sold in this offering will be freely tradable without restriction or further registration under the Securities Act of 1933, as amended (the “Securities Act”), unless held by our “affiliates” as defined in Rule 144 under the Securities Act. The resale of the remaining          shares, or approximately          % of our outstanding shares of common stock following this offering, is currently prohibited or otherwise restricted as a result of securities law provisions, market standoff agreements entered into by certain of our stockholders with us or lock-up agreements entered into by our stockholders with the underwriters in connection with this offering. However, subject to applicable securities law restrictions, these shares will be able to be sold in the public market beginning 181 days after the date of this prospectus. Shares issued upon the exercise of stock options and warrants outstanding under our equity incentive plans or pursuant to future awards granted under those plans will become available for sale in the public market to the extent permitted by the provisions of applicable vesting schedules, market stand-off agreements and/or lock-up agreements, as well as Rules 144 and 701 under the Securities Act. For more information, see “Shares Eligible for Future Sale.”

Upon the completion of this offering, the holders of approximately          shares, or approximately          % of our outstanding shares following this offering, of our common stock will have rights, subject to some conditions, to require us to file registration statements covering the sale of their shares or to include their shares in registration statements that we may file for ourselves or our other stockholders. We also intend to register the offer and sale of all shares of common stock that we may issue under our equity compensation plans. Once we register the offer and sale of shares for the holders of registration rights and shares that may be issued under our equity incentive plans, these shares will be able to be sold in the public market upon issuance, subject to the lock-up agreements described under “Underwriting.”

In addition, in the future, we may issue additional shares of common stock, or other equity or debt securities convertible into common stock, in connection with a financing, acquisition, employee arrangement or otherwise. Any such issuance could result in substantial dilution to our existing stockholders and could cause the price of our common stock to decline.

We have broad discretion in how we use the net proceeds of this offering and may not use these proceeds effectively, which could affect our results of operations and cause our stock price to decline.

We will have considerable discretion in the application of the net proceeds of this offering, including for any of the purposes described in the section of this prospectus titled “Use of Proceeds,” and you will not have the opportunity as part of your investment decision to assess whether the net proceeds are being used appropriately. As a result, investors will be relying upon management’s judgment with only limited information about our specific intentions for the use of the balance of the net proceeds of this offering. We may use the net proceeds for purposes that do not yield a significant return or any return at all for our stockholders. In addition, pending their use, we may invest the net proceeds from this offering in a manner that does not produce income or that loses value.

Anti-takeover provisions in our charter documents and under Delaware law could prevent or delay an acquisition of us that may be beneficial to our stockholders, and may prevent attempts by our stockholders to replace or remove our current management.

Our restated certificate of incorporation and our restated bylaws that will be in effect upon completion of this offering contain provisions that could depress the market price of our common stock by acting to discourage, delay or prevent a change in control of our company. These provisions could also make it difficult for stockholders to elect directors who are not nominated by current members of our Board or take other corporate actions, including effecting changes in our management. These provisions:

•        establish a classified board of directors so that not all members of our Board are elected at one time;

•        permit only the Board to establish the number of directors and fill vacancies on the board of directors;

•        provide that directors may only be removed “for cause” and only with the approval of two-thirds of our stockholders;

•        require super-majority voting to amend some provisions in our restated certificate of incorporation and restated bylaws;

•        authorize the issuance of “blank check” preferred stock that our board of directors could use to implement a stockholder rights plan;

•        eliminate the ability of our stockholders to call special meetings of stockholders;

•        prohibit stockholder action by written consent, which requires all stockholder actions to be taken at a meeting of our stockholders;

•        prohibit cumulative voting; and

•        establish advance notice requirements for nominations for election to our board of directors or for proposing matters that can be acted upon by stockholders at annual stockholder meetings.

In addition, Section 203 of the Delaware General Corporation Law (the “DGCL”) prohibits a publicly held Delaware corporation from engaging in a business combination with an interested stockholder, generally a person which together with its affiliates owns, or within the last three years has owned, 15% of our voting stock, for a period of three years after the date of the transaction in which the person became an interested stockholder, unless the transaction is approved in a prescribed manner.

Any provision of our certificate of incorporation, bylaws or Delaware law that has the effect of delaying or preventing a change in control could limit the opportunity for our stockholders to receive a premium for their shares of our capital stock and could also affect the price that some investors are willing to pay for our common stock.

The exclusive forum provisions in our organizational documents may limit a stockholder’s ability to bring a claim in a judicial forum that it finds favorable for disputes with us or any of our directors, officers, or employees, or the underwriters of any offering giving rise to such claim, which may discourage lawsuits with respect to such claims.

Our amended and restated certificate of incorporation that will be in effect upon completion of this offering, to the fullest extent permitted by law, will provide that the Court of Chancery of the State of Delaware is the exclusive forum for: any derivative action or proceeding brought on our behalf; any action asserting a breach of fiduciary duty;

any action asserting a claim against us arising pursuant to the DGCL, our restated certificate of incorporation, or our restated bylaws; or any action asserting a claim that is governed by the internal affairs doctrine. This exclusive forum provision does not apply to suits brought to enforce a duty or liability created by the Exchange Act.

This choice of forum provision may limit a stockholder’s ability to bring a claim in a judicial forum that it finds favorable for disputes with us or any of our directors, officers, or other employees, or the underwriters of any offering giving rise to such claims, which may discourage lawsuits with respect to such claims. Alternatively, if a court were to find the choice of forum provisions contained in our restated certificate of incorporation to be inapplicable or unenforceable in an action, we may incur additional costs associated with resolving such action in other jurisdictions, which could harm our business, financial condition, results of operations and prospects.

Section 22 of the Securities Act creates concurrent jurisdiction for federal and state courts over all claims brought to enforce any duty or liability created by the Securities Act or the rules and regulations thereunder. Our restated bylaws will provide that the federal district courts of the United States of America will, to the fullest extent permitted by law, be the exclusive forum for resolving any complaint asserting a cause of action arising under the Securities Act (the “Federal Forum Provision”), including for all causes of action asserted against any defendant named in such complaint. For the avoidance of doubt, this provision is intended to benefit and may be enforced by us, our officers and directors, the underwriters to any offering giving rise to such complaint, and any other professional entity whose profession gives authority to a statement made by that person or entity and who has prepared or certified any part of the documents underlying the offering. Our decision to adopt a Federal Forum Provision followed a decision by the Supreme Court of the State of Delaware holding that such provisions are facially valid under Delaware law. While federal or other state courts may not follow the holding of the Delaware Supreme Court or may determine that the Federal Forum Provision should be enforced in a particular case, application of the Federal Forum Provision means that suits brought by our stockholders to enforce any duty or liability created by the Securities Act must be brought in federal court and cannot be brought in state court, and our stockholders cannot waive compliance with the federal securities laws and the rules and regulations thereunder. Section 27 of the Exchange Act creates exclusive federal jurisdiction over all claims brought to enforce any duty or liability created by the Exchange Act or the rules and regulations thereunder. In addition, neither the exclusive forum provision nor the Federal Forum Provision applies to suits brought to enforce any duty or liability created by the Exchange Act. Accordingly, actions by our stockholders to enforce any duty or liability created by the Exchange Act or the rules and regulations thereunder must be brought in federal court, and our stockholders cannot waive compliance with the federal securities laws and the rules and regulations thereunder.

Any person or entity purchasing or otherwise acquiring or holding any interest in any of our securities shall be deemed to have notice of and consented to our exclusive forum provisions in our restated bylaws, including the Federal Forum Provision. These provisions may limit a stockholders’ ability to bring a claim, and may result in increased costs for a stockholder to bring such a claim, in a judicial forum of their choosing for disputes with us or our directors, officers, other employees or agents, which may discourage lawsuits against us and our directors, officers, other employees or agents.

Our Board will be authorized to issue and designate shares of our preferred stock without stockholder approval.

Our amended and restated certificate of incorporation will authorize our Board, without the approval of our stockholders, to issue shares of preferred stock, subject to limitations prescribed by applicable law, rules and regulations and the provisions of our amended and restated certificate of incorporation, and to establish from time to time the number of shares of preferred stock to be included in each such series and to fix the designation, powers, preferences and rights of the shares of each such series and the qualifications, limitations or restrictions thereof. The powers, preferences and rights of these additional series of convertible preferred stock may be senior to or on parity with our common stock, which may reduce our common stock’s value.

Because we do not anticipate paying any dividends on our capital stock in the foreseeable future, capital appreciation, if any, will be your sole source of gain.

We have never declared nor paid dividends on our capital stock. We currently intend to retain all of our future earnings, if any, to finance the growth and development, operation and expansion of our business and we do not anticipate declaring or paying any dividends in the foreseeable future. As a result, capital appreciation of our common stock, which may never occur, will be your sole source of gain on your investment for the foreseeable future.

General Risk Factors

The requirements of being a public company may strain our resources, result in more litigation and divert management’s attention.

As a public company, we will be subject to the reporting requirements of the Exchange Act, the Sarbanes-Oxley Act, the Dodd-Frank Wall Street Reform and Consumer Protection Act (the “Dodd-Frank Act”), the listing requirements of the Nasdaq Global Market and other applicable securities rules and regulations. Complying with these rules and regulations has increased and will increase our legal and financial compliance costs, make some activities more difficult, time consuming or costly and increase demand on our systems and resources. The Exchange Act requires, among other things, that we file annual, quarterly and current reports with respect to our business and results of operations. The Sarbanes-Oxley Act requires, among other things, that we maintain effective disclosure controls and procedures and internal control over financial reporting. We are required to disclose changes made in our internal control and procedures on a quarterly basis. In order to maintain and, if required, improve our disclosure controls and procedures and internal control over financial reporting to meet this standard, significant resources and management oversight may be required. As a result, management’s attention may be diverted from other business concerns, which could adversely affect our business and results of operations. We may also need to hire additional employees or engage outside consultants to comply with these requirements, which will increase our costs and expenses.

In addition, changing laws, regulations and standards relating to corporate governance and public disclosure are creating uncertainty for public companies, increasing legal and financial compliance costs and making some activities more time consuming. These laws, regulations and standards are subject to varying interpretations, in many cases due to their lack of specificity and, as a result, their application in practice may evolve over time as new guidance is provided by regulatory and governing bodies. This could result in continuing uncertainty regarding compliance matters and higher costs necessitated by ongoing revisions to disclosure and governance practices. We intend to invest resources to comply with evolving laws, regulations and standards, and this investment may result in increased general and administrative expenses and a diversion of management’s time and attention from revenue-generating activities to compliance activities. If our efforts to comply with new laws, regulations and standards differ from the activities intended by regulatory or governing bodies due to ambiguities related to their application and practice, regulatory authorities may initiate legal proceedings against us, and our business may be adversely affected.

These new rules and regulations may make it more expensive for us to obtain director and officer liability insurance and, in the future, we may be required to accept reduced coverage or incur substantially higher costs to obtain coverage. These factors could also make it more difficult for us to attract and retain qualified members of our Board, particularly to serve on our audit committee and compensation committee, and qualified executive officers.

By disclosing information in this prospectus and in future filings required of a public company, our business and financial condition will become more visible, which we believe may result in threatened or actual litigation, including by competitors and other third parties. If those claims are successful, our business could be seriously harmed. Even if the claims do not result in litigation or are resolved in our favor, the time and resources needed to resolve them could divert our management’s resources and seriously harm our business.

We are an “emerging growth company” and we cannot be certain if the reduced reporting requirements applicable to emerging growth companies will make our common stock less attractive to investors.

We are an “emerging growth company” as defined in the JOBS Act. For as long as we continue to be an emerging growth company, we may take advantage of exemptions from various reporting requirements that are applicable to other public companies that are not emerging growth companies, including (i) not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act, (ii) reduced disclosure obligations regarding executive compensation in this prospectus and our periodic reports and proxy statements and (iii) exemptions from the requirements of holding nonbinding advisory stockholder votes on executive compensation and stockholder approval of any golden parachute payments not approved previously. In addition, as an emerging growth company, we are only required to provide two years of audited financial statements and two years of selected financial data in this prospectus.

We could be an emerging growth company for up to five years following the completion of this offering, although circumstances could cause us to lose that status earlier, including if we are deemed to be a “large accelerated filer,” or if we have total annual gross revenue of $1.235 billion or more during any fiscal year before that time, in which cases

we would no longer be an emerging growth company as of the December 31 of such year, or if we issue more than $1.0 billion in non-convertible debt during any three-year period before that time, in which case we would no longer be an emerging growth company immediately.

Under the JOBS Act, emerging growth companies can also delay adopting new or revised accounting standards until such time as those standards apply to private companies. We have elected to take advantage of the benefits of this extended transition period. Our financial statements may therefore not be comparable to those of companies that comply with such new or revised accounting standards. Until the date that we are no longer an “emerging growth company” or affirmatively and irrevocably opt out of the exemption provided by Section 7(a)(2)(B) of the Securities Act, upon issuance of a new or revised accounting standard that applies to our financial statements and that has a different effective date for public and private companies, we will disclose the date on which adoption is required for non-emerging growth companies and the date on which we will adopt the recently issued accounting standard.

If we fail to maintain an effective system of internal controls over financial reporting, we may not be able to accurately report our financial results or prevent fraud. As a result, stockholders could lose confidence in our financial and other public reporting, which would harm our business and the trading price of our common stock.

Effective internal controls over financial reporting are necessary for us to provide reliable financial reports and, together with adequate disclosure controls and procedures, are designed to prevent fraud. Any failure to implement required new or improved controls, or difficulties encountered in their implementation could cause us to fail to meet our reporting obligations. In addition, any testing by us conducted in connection with Section 404, or any subsequent testing by our independent registered public accounting firm, may reveal deficiencies in our internal controls over financial reporting that are deemed to be material weaknesses or that may require prospective or retroactive changes to our financial statements or identify other areas for further attention or improvement. Inferior internal controls could also cause investors to lose confidence in our reported financial information, which could have a negative effect on the trading price of our stock.

We will be required to disclose changes made in our internal controls and procedures on a quarterly basis and once we are no longer “an emerging growth company,” management will be required to assess the effectiveness of these controls annually. An independent assessment of the effectiveness of our internal controls over financial reporting could detect problems that our management’s assessment might not. Undetected material weaknesses in our internal controls over financial reporting could lead to restatements of our financial statements and require us to incur the expense of remediation.

Unstable economic and market conditions may have serious adverse consequences on our business, financial condition and stock price.

Global economic and business activities continue to face widespread uncertainties, and global credit and financial markets have experienced extreme volatility and disruptions in the past several years, including severely diminished liquidity and credit availability, rising inflation and monetary supply shifts, rising interest rates, labor shortages, declines in consumer confidence, declines in economic growth, increases in unemployment rates, recession risks, and uncertainty about economic and geopolitical stability (e.g., related to the ongoing Russia-Ukraine conflict and Israel-Palestine conflict). The extent of the impact of these conditions on our operational and financial performance, including our ability to execute our business strategies and initiatives in the expected timeframe, as well as that of third parties upon whom we rely, will depend on future developments which are uncertain and cannot be predicted. There can be no assurance that further deterioration in economic or market conditions will not occur, or how long these challenges will persist. If the current equity and credit markets further deteriorate, or do not improve, it may make any necessary debt or equity financing more difficult, more costly, and more dilutive. Furthermore, our stock price may decline due in part to the volatility of the stock market and the general economic downturn.

The success of our business is dependent on our brand equity.

Negative press coverage, lawsuits, regulatory investigations, unfavorable publicity, or allegations of wrongdoings could affect our reputation and result in a loss of brand equity. Any assertion of wrongdoing by a Company executive, associate, or hired independent contractor, despite a lack of factual basis, may affect our brand image and reputation. If we fail to maintain and affirmatively protect our brand value, demand for our services could wane and we may fail

SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

This prospectus contains forward-looking statements within the meaning of the federal securities laws, which statements involve substantial risks and uncertainties. Forward-looking statements generally relate to possible or assumed future results of our business, financial condition, results of operations, liquidity, plans and objectives. You can generally identify forward-looking statements because they contain words such as “may,” “will,” “should,” “expects,” “plans,” “anticipates,” “could,” “intends,” “target,” “projects,” “contemplates,” “believes,” “estimates,” “predicts,” “potential” or “continue” or the negative of these terms or other similar expressions that concern our expectations, strategy, plans or intentions. We have based these forward-looking statements largely on our current expectations and projections regarding future events and trends that we believe may affect our business, financial condition and results of operations. The outcome of the events described in these forward-looking statements is subject to risks, uncertainties and other factors described in the section entitled “Risk Factors” and elsewhere in this prospectus. Accordingly, you should not rely upon forward-looking statements as predictions of future events. We cannot assure you that the results, events and circumstances reflected in the forward-looking statements will be achieved or occur, and actual results, events or circumstances could differ materially from those projected in the forward-looking statements. Forward-looking statements contained in this prospectus include, but are not limited to, statements regarding:

•        the economic conditions in the global markets in which we operate;

•        our ability to successfully implement our business strategy, effectively respond to changes in market dynamics and customer preferences, and achieve the anticipated benefits and associated cost savings of such strategies and actions;

•        our ability to recruit and retain qualified driving associates, independent contractors and third-party auto transportation and logistics companies;

•        our expectations regarding the successful implementation of the Combinations;

•        geopolitical developments and additional changes in international trade policies and relations;

•        the effect of any international conflicts or terrorist activities, including the current conflict between Russia and Ukraine, on the United States and global economies in general, the transportation industry, or us in particular, and what effects these events will have on our costs and the demand for our services;

•        our ability to manage our network capacity and cost structure for capital expenditures and operating expenses, and match it to shifting and future customer volume levels;

•        our ability to compete effectively against current and future competitors;

•        our ability to maintain our profitability despite quarterly fluctuations in our results, whether due to seasonality, large cyclical events, or other causes; and our future financial and operating results;

•        our expectations regarding the period during which we will qualify as an emerging growth company under the JOBS Act; and

•        our use of the net proceeds from this offering and the sufficiency of our existing cash to fund our future operating expenses and capital expenditure requirements.

We caution you that the foregoing list may not contain all of the forward-looking statements made in this prospectus. In addition, in light of certain risks and uncertainties, the matters referred to in the forward-looking statements contained in this prospectus may not occur. The forward-looking statements made in this prospectus relate only to events as of the date on which the statements are made. We undertake no obligation to update any forward-looking statement to reflect events or circumstances after the date on which the statement is made or to reflect the occurrence of unanticipated events. We may not actually achieve the plans, intentions or expectations disclosed in our forward-looking statements and you should not place undue reliance on our forward-looking statements. We do not assume any obligation to update any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.

MARKET, INDUSTRY AND OTHER DATA

This prospectus includes estimates regarding market and industry data. Unless otherwise indicated, information concerning our industry and the markets in which we operate, including our general expectations, market position, market opportunity and market size, are based on our management’s knowledge and experience in the markets in which we operate, together with currently available information obtained from various sources, including publicly available information, industry reports and publications, surveys, our customers, trade and business organizations, and other contacts in the markets in which we operate. Certain information is based on management estimates, which have been derived from third-party sources, as well as data from our internal research, and are based on certain assumptions that we believe to be reasonable.

In presenting this information, we have made certain assumptions that we believe to be reasonable based on such data and other similar sources and on our knowledge of, and our experience to date in, the markets in which we operate. Internal estimates are derived from publicly available information released by industry analysts and third-party sources, our internal research and our industry experience, and are based on assumptions made by us based on such data and our knowledge of our industry and market, which we believe to be reasonable. In some cases, we do not expressly refer to the sources from which this data is derived. In that regard, when we refer to one or more sources of this type of data in any paragraph, you should assume that other data of this type appearing in the same paragraph is derived from the same sources, unless otherwise expressly stated or the context otherwise requires. In addition, while we believe the industry, market and competitive position data included in this prospectus is reliable and based on reasonable assumptions, such data involve risks and uncertainties and are subject to change based on various factors, including those discussed in the sections titled “Risk Factors” and “Special Note Regarding Forward-Looking Statements.” These and other factors could cause results to differ materially from those expressed in the estimates made by the independent parties or by us.

USE OF PROCEEDS

We estimate that the net proceeds from the sale of shares of our common stock will be approximately $            million, based on the assumed initial public offering price of $              per share, the midpoint of the estimated offering price range set forth on the cover of this prospectus, after deducting underwriting discounts and commissions and estimated offering expenses payable by us. If the underwriters’ option to purchase additional shares from us is exercised in full, we estimate that we will receive additional net proceeds of approximately $               million after deducting underwriting discounts and commissions and estimated offering expenses payable by us.

Each $1.00 increase or decrease in the assumed initial public offering price of $            per share, which is the midpoint of the estimated price range set forth on the cover page of this prospectus, would increase (decrease) the net proceeds to us from this offering by approximately $            million, assuming the number of shares offered by us, as set forth on the cover page of this prospectus, remains the same, and after deducting estimated underwriting discounts and commissions and estimated offering expenses payable by us. Similarly, each increase (decrease) of 1,000,000 shares in the number of shares of common stock offered by us would increase (decrease) the net proceeds to us from this offering by approximately $            million, assuming the assumed initial public offering price of $            per share remains the same, and after deducting estimated underwriting discounts and commissions and estimated offering expenses payable by us.

Approximately $            million will be used to pay the cash portion of the Combinations consideration payable to the equity holders of the Founding Companies and approximately $            will be used to pay expenses incurred in connection with the Combinations. The remaining net proceeds will be used for general corporate purposes, which are expected to include working capital and future acquisitions. Pending the foregoing uses, the proceeds will be invested in short-term, investment-grade, interest-bearing securities. While we continuously consider possible acquisition prospects as part of our growth strategy, we presently have no agreements, arrangements or other understandings to acquire any companies other than the Founding Companies.

Until we use the proceeds we receive from this offering for the above-mentioned purposes, we intend to invest the net proceeds in short-term, investment-grade interest-bearing securities such as money market funds, certificates of deposit, commercial paper, high grade and investment grade corporate debt securities, and obligations of the U.S. government and government agencies.

DIVIDEND POLICY

We currently intend to retain all available funds and any future earnings to fund the development and growth of our business and to repay indebtedness and, therefore, we do not anticipate paying any cash dividends in the foreseeable future. Any determination to pay dividends in the future will be at the discretion of our Board and will depend on a number of factors, including our earnings, capital requirements and overall financial condition. In addition, our ability to pay cash dividends on our capital stock in the future may be limited by the terms of any future debt or preferred securities we issue or any credit facilities we enter into.

DILUTION

If you invest in our common stock in this offering, your interest will be diluted immediately to the extent of the difference between the initial public offering price per share of common stock and the pro forma as adjusted net tangible book value per share of our common stock immediately after this offering.

As of December 31, 2023, Proficient’s historical net tangible book value (deficit) was $            million, or $            per share of common stock based on 2,939,130 shares of Proficient common stock (including          shares subject to repurchase as of such date) outstanding as of such date. Our historical net tangible book value (deficit) per share represents the amount of our total tangible assets (which excludes deferred costs) less our total liabilities, divided by the number of shares of our common stock outstanding as of December 31, 2023 (including          shares of our common stock subject to repurchase as of such date).

Our pro forma net tangible book value as of December 31, 2023 was $            million, or $            per share of common stock. Pro forma net tangible book value per share represents the amount of our total tangible assets less our total liabilities after giving effect to the issuance of        shares of common stock, assuming an initial public offering price of $        per share, which is the midpoint of the estimated price range set forth on the cover page of this prospectus, upon the closing of this offering in connection with the consummation of the Combinations.

After giving effect to our issuance and sale of shares of our common stock in this offering at the assumed initial public offering price of $            per share, the midpoint of the estimated price range set forth on the cover page of this prospectus, and after deducting estimated underwriting discounts and commissions and estimated offering expenses payable by us, our pro forma as adjusted net tangible book value as of December 31, 2023 would have been $            million, or $            per share of our common stock. This amount represents an immediate increase in pro forma as adjusted net tangible book value of $            per share to our existing stockholders and an immediate dilution in pro forma as adjusted net tangible book value of $            per share to investors purchasing common stock in this offering. We determine dilution by subtracting the pro forma as adjusted net tangible book value per share after this offering from the initial public offering price per share paid by new investors. The following table illustrates this dilution on a per share basis:

The dilution information discussed above is illustrative only and may change based on the actual initial public offering price and other terms of this offering. Each $1.00 increase or decrease in the assumed initial public offering price of $            per share, which is the midpoint of the estimated price range set forth on the cover page of this prospectus, would increase (decrease) our pro forma as adjusted net tangible book value per share after this offering by $            per share and increase (decrease) the dilution to new investors purchasing shares of common stock in this offering by $            per share, in each case assuming the number of shares of common stock offered by us, as set forth on the cover page of this prospectus, remains the same, and after deducting estimated underwriting discounts and commissions and estimated offering expenses payable by us. Similarly, each increase (decrease) of 1,000,000 shares in the number of shares of common stock offered by us would increase (decrease) our pro forma as adjusted net tangible book value by approximately $            per share and decrease (increase) the dilution to investors purchasing shares in this offering by approximately $            per share, in each case assuming the assumed initial public offering price of $            per share remains the same, and after deducting estimated underwriting discounts and commissions and estimated offering expenses payable by us.

If the underwriters exercise their option to purchase additional shares of our common stock in full, the pro forma net tangible book value per share, as adjusted to give effect to this offering, would be $            per share, and the dilution in pro forma net tangible book value per share to new investors in this offering would be $            per share, in each case assuming an initial public offering price of $            per share, which is the midpoint of the estimated price range set forth on the cover of this prospectus.

The following table summarizes on the pro forma as adjusted basis as of December 31, 2023, the total number of shares of common stock purchased from us, the total consideration paid or to be paid, and the weighted-average price per share paid or to be paid by existing stockholders and by new investors in this offering at an assumed initial public offering price of $            per share, which is the midpoint of the estimated price range set forth on the cover of this prospectus, before deducting estimated underwriting discounts and commissions and estimated offering expenses payable by us. As the table shows, new investors purchasing common stock in this offering will pay an average price per share substantially higher than our existing stockholders paid.

____________

(1)      The presentation in this table regarding ownership by existing stockholders does not give effect to any purchases that existing stockholders may make through our directed share program or otherwise purchase in this offering.

The table above assumes no exercise of the underwriters’ option to purchase additional shares in this offering. If the underwriters’ option to purchase additional shares is exercised in full, the number of shares of our common stock held by existing stockholders would be reduced to            % of the total number of shares of our common stock outstanding after this offering, and the number of shares of common stock held by investors purchasing common stock in this offering would be increased to            % of the total number of shares of our common stock outstanding after this offering.

The number of shares of our common stock to be outstanding after this offering is based on 2,939,130 shares of common stock outstanding as of December 31, 2023 (including              shares of our common stock subject to repurchase as of such date) and gives effect to the Combinations.

The number of shares of common stock to be outstanding after this offering in the table and discussion above excludes             shares of common stock that will become available for future grants under our 2024 Long-Term Incentive Plan, which will become effective prior to and in connection with this offering.

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

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with the historical financial statements of the relevant entities and the pro forma financial statements and the notes thereto included elsewhere in this prospectus. This discussion and analysis contains forward-looking statements that involve risks and uncertainties. Our actual results may differ materially from those anticipated in these forward-looking statements as a result of various factors, including those set forth under “Risk Factors” and “Special Note Regarding Forward-Looking Statements.”

Business Overview

We are a leading non-union, specialized freight company focused on providing auto transportation and logistics services. Formed in connection with this offering through the combination of five industry-leading operating companies, we will operate one of the largest auto transportation fleets in North America based upon information obtained from leadership of the Auto Haulers Association of America, utilizing roughly 1,130 auto transport vehicles and trailers on a daily basis, including 615 Company-owned transport vehicles and trailers, and employing 649 dedicated employees as of November 30, 2023. Prior to the completion of this offering, we have not operated as a combined company and are dependent upon this offering to complete the Combinations. From our 49 strategically located facilities across the United States, we offer a broad range of auto transportation and logistics services, primarily focused on transporting finished vehicles from automotive production facilities, marine ports of entry or regional rail yards to auto dealerships around the country. We have developed a differentiated business model due to our scale, breadth of geographic coverage and embedded customer relationships with leading auto original equipment manufacturing companies (“OEMs”). Our customers range from large, global auto companies, such as General Motors, BMW, Stellantis, and Mercedes Benz, to electric vehicle (“EV”) producers, such as Tesla and Rivian. Additional customers include auto dealers, auto auctions, rental car companies and auto leasing companies. For the year ended December 31, 2023, we had pro forma combined total operating revenue of $           million, pro forma combined net income of $           million and pro forma combined EBITDA of $           million. Our pro forma combined financial results cover periods during which we were not under common control or management and, therefore, may not be indicative of our future financial or operating results. See “Prospectus Summary — Summary Financial Data.”

Prior to this offering, Proficient entered into agreements to acquire, in multiple, separate acquisitions, five operating businesses and their respective affiliated entities, as applicable, operating under the following names: (i) Delta Automotive Services, Inc., doing business as Delta Auto Transport, Inc. (“Delta”), (ii) Deluxe Auto Carriers, Inc. (“Deluxe”), (iii) Sierra Mountain Group, Inc. (“Sierra”), (iv) Proficient Auto Transport, Inc. (“Proficient Transport”), and (v) Tribeca Automotive Inc. (“Tribeca” and, together with Delta, Deluxe, Sierra, and Proficient Transport, the “Founding Companies”). The Founding Companies will be acquired for a combination of cash and shares of our common stock. A portion of the net proceeds from this offering will be used to pay the cash portion of the consideration in the Combinations payable to the equity holders of the Founding Companies. We will not close the acquisition of any of the Founding Companies unless we close the acquisition of all of the Founding Companies. Furthermore, the closing of the Combinations and this offering are conditioned on the closing of each other. Therefore, if we fail to close the Combinations, this offering will not close. Because of this structure, we have not yet operated as a combined company and do not currently have a combined operating history. The description of our business that follows assumes that the Combinations have occurred and the operations of the Founding Companies have been combined.

We have entered into agreements with the owners of each of the Founding Companies to combine their businesses. The consideration to be paid by Proficient in the Combinations, subject to adjustment and including, among other things, amounts held in escrow, consists of approximately $180.4 million in cash and approximately             shares of common stock, assuming a public offering price of $            per share. The cash portion of the Combinations consideration is generally subject to adjustment based upon the Founding Companies’ working capital on the closing date and certain other factors. The consideration was determined by arm’s length negotiations between Proficient and representatives of each Founding Company. Each of the owners of the Founding Companies has agreed not to sell their shares of our common stock for not less than 180 days after the date of this prospectus, subject to certain exceptions. For a more detailed description of these transactions, see “Certain Relationships and Related Person Transactions — The Combinations with the Founding Companies.”

Financial Statement Components

Revenue

We generate revenue by transporting freight for our customers in our OEM contract arrangements and our contract services arrangements. Our OEM contract arrangements provide auto transportation and logistics services through movements of freight over routes across the United States. Our contract services offering devotes the use of equipment to specific customers and provides services through long-term contracts. Our business provides services that are geographically diversified but have similar economic and other relevant characteristics, as they all provide transportation and logistics of automobiles.

We are typically paid a predetermined rate per load or per mile for our truckload services. Consistent with industry practice, our typical customer contracts do not guarantee load levels or tractor availability. This gives us and our customers a certain degree of flexibility to negotiate rates up or down in response to changes in freight demand and truck capacity.

Generally, we receive fuel surcharges on the miles for which we are compensated by customers. Fuel surcharges revenue mitigates the effect of price increases over a negotiated base rate per gallon of fuel; however, these revenues may not fully protect us from all fuel price increases.

The key factors that affect our operating revenue include the average revenue per mile we receive from our customers, the number of units delivered, and in some cases, the number of hours driven. We therefore monitor as key operating metrics average revenue per mile, average revenue per unit, and average revenue per hour, as applicable to the portions of our business that contract on each of these bases.

Operating Expenses

Our most significant operating expenses vary with miles traveled and include (i) fuel and fuel taxes, (ii) driver related expenses, such as salaries, wages, benefits, training and recruitment, (iii) the cost of purchased transportation that we pay to third-party carriers and (iv) costs associated with our executed contracts. Expenses that have both fixed and variable components include maintenance and tire expense and our total cost of insurance and claims. These expenses generally vary with the miles we travel, but also have a controllable component based on safety, fleet age, efficiency and other factors. Our main fixed costs include depreciation of long-term assets, such as revenue equipment and service center facilities, the compensation of non-driver personnel and other general and administrative expenses.

Critical Accounting Policies and Estimates

In the ordinary course of business, we have made a number of estimates and assumptions relating to the reporting of results of operations and financial position in the preparation of our financial statements in conformity with generally accepted accounting principles (“GAAP”). Actual results could differ significantly from those estimates under different assumptions and conditions. We believe that the following discussion addresses our most critical accounting policies, which are those that are most important to the portrayal of our financial condition and results of operations and require management’s most difficult, subjective and complex judgments, often as a result of the need to make estimates about the effect of matters that are inherently uncertain. See Note 2 of the accompanying consolidated financial statements for additional information about our critical accounting policies and estimates.

Business Combinations

We account for business combinations using the acquisition method of accounting where the assets acquired and liabilities assumed are recognized based on their respective estimated fair values. The excess of the purchase price over the estimated fair values of the net assets acquired is recorded as goodwill. Determining the fair value of certain acquired assets and liabilities is subjective in nature and often involves the use of significant estimates and assumptions, including, but not limited to, the selection of appropriate valuation methodology, projected revenue, expenses, and cash flows, weighted average cost of capital, discount rates, and estimates of terminal values. Business combinations are included in our consolidated financial statements as of the date of the acquisition.

Claims and insurance accruals

Claims and insurance accruals consist of cargo loss, physical damage, group health, liability (personal injury and property damage) and workers’ compensation claims and associated legal and other expenses within the Company’s established retention levels. Claims in excess of retention levels are generally covered by insurance in amounts the Company considers adequate. Claims accruals represent the uninsured portion of the loss and if we are the primary obligor, the insured portion of pending claims, plus an estimated liability for incurred but not reported claims and the associated expense. Accruals for cargo loss, physical damage, group health, liability and workers’ compensation claims are estimated based on the Company’s evaluation of the type and severity of individual claims and future development based on historical trends. Changes in assumptions made in actuarial studies could potentially have a material effect on the provision for workers’ compensation and liability claims. Additionally, if any claim were to exceed our coverage limits, we would have to accrue for and pay the excess amount, which could have a material adverse effect on our financial condition, results of operations and cash flows.

Property and equipment

Property and equipment are carried at cost. Depreciation of property and equipment is computed using the straight-line method for financial reporting purposes and accelerated methods for tax purposes over the estimated useful lives of the related assets (net of estimated salvage value or trade-in value). We generally use estimated useful lives of five to ten years for trucks and trailers, classified as transportation equipment. The depreciable lives of our revenue equipment represent the estimated usage period of the equipment, which is generally substantially less than the economic lives. The residual value of a substantial portion of our equipment is covered by repurchase or trade agreements between us and the equipment manufacturer.

Periodically, we evaluate the useful lives and salvage values of our revenue equipment and other long-lived assets based upon, but not limited to, our experience with similar assets including gains or losses upon dispositions of such assets, conditions in the used equipment market and prevailing industry practices. Changes in useful lives or salvage value estimates, or fluctuations in market values that are not reflected in our estimates, could have a material impact on our financial results. Further, if our equipment manufacturer does not perform under the terms of the agreements for guaranteed trade-in values, such non-performance could have a materially negative impact on financial results. We review our property and equipment whenever events or circumstances indicate the carrying amount of the asset may not be recoverable. An impairment loss equal to the excess of carrying amount over fair value would be recognized if the carrying amount of the asset is not recoverable.

Income taxes

Income taxes are accounted for under the asset-and-liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statements carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized as income or expense in the period that includes the enactment date.

We evaluate the need for a valuation allowance on deferred tax assets based on whether we believe that it is more likely than not all deferred tax assets will be realized. A consideration of future taxable income is made as well as on-going prudent feasible tax planning strategies in assessing the need for valuation allowances. In the event it is determined all or part of a deferred tax asset would not be able to be realized, management would record an adjustment to the deferred tax asset and recognize a charge against income at that time.

Our estimates of the potential outcome of any uncertain tax issue is subject to our assessment of relevant risks, facts and circumstances existing at that time. We account for uncertain tax positions in accordance with Accounting Standards Codification (“ASC”) 740, Income Taxes, and record a liability when such uncertainties meet the more likely than not recognition threshold. Potential accrued interest and penalties related to unrecognized tax benefits are recognized as a component of income tax expense.

Reportable Segments

Our business is organized into two operating segments, Truckload and Brokerage, which represent the Company’s reportable segments. The Truckload segment offers automobile transport and contract services under an asset-based model. The Company’s contract service offering devotes the use of equipment to specific customers and provides transportation services through long-term contracts. The Company’s Brokerage segment offers transportation services utilizing an asset-light model focusing on outsourcing transportation of loads to third-party carriers. With respect to historical periods, only Proficient Transport had two reportable segments.

Truckload Segment

In our Truckload Segment, we generate revenue by transporting freight for our customers under our OEM contract arrangements and our contract services arrangements. Our OEM contract arrangements provide automobile transportation services through movements of freight over routes across the United States. Our Truckload segment provides services that are geographically diversified but have similar economic and other relevant characteristics, as they all provide truckload carrier services of automobiles. The main factors that affect operating revenue in the Truckload Segment are the average revenue per mile received from customers, the percentage of miles for which we are compensated and the number of vehicles transported.

We are typically paid a predetermined rate per load or per unit for our Truckload services. Our executed contracts contain fixed terms and rates and are often used by our customers with high-service and high-priority freight. We continually strive to increase our revenues derived from contracts as a percentage of total revenue by continuing to build upon our existing relations and acquire new relations with OEMs.

Our contracts with customers in the Truckload segment generally include a fuel surcharge to account for fluctuating fuel prices. Built into our predetermined contract rates with each customer is a baseline fuel price and when fuel prices rise above this baseline price our customers compensate us for the variance in the form of additional revenue. If fuel prices drop below the baseline price, we in turn owe our customers this variance and record a discount. This additional revenue/discount is represented on the Fuel Surcharge and Other Reimbursements line in our consolidated financial statements. Fuel surcharge revenue mitigates the effect of price increases over the life of the contract; however, these revenues may not fully protect us from all fuel price increases. Conversely, any discount related to a decline in fuel prices mitigates any upside we would otherwise experience from such decline.

In our Truckload segment, our most significant operating expenses vary with miles traveled and include (i) fuel, and (ii) driver related expenses, such as wages, benefits, training and recruitment. Expenses that have both fixed and variable components include maintenance and tire expense and our total cost of insurance and claims. These expenses generally vary with the miles we travel, but also have a controllable component based on safety, fleet age, efficiency and other factors. Our main fixed costs include depreciation of long-term assets, such as trucks and trailers (to which we refer as revenue equipment) and service center facilities, the compensation of non-driver personnel and other general and administrative expenses.

Our Truckload segment requires substantial capital expenditures for purchase of new revenue equipment. We use a combination of financing leases and secured long-term debt to acquire revenue equipment. When we finance revenue equipment acquisitions with either finance leases or long-term debt, the asset and liability are recorded on our consolidated balance sheet, and we record expense under “Depreciation and amortization” and “Interest expense.” We expect our depreciation and amortization and interest expense will be impacted by changes in the percentage of our revenue equipment acquired in any given year.

Brokerage Segment

In our Brokerage segment, we retain the customer relationship, including billing and collection, and we outsource the transportation of the loads to third-party carriers. For this segment, we rely on brokerage employees to procure spot buy arrangement contracts, as well as information systems to match loads and carriers. This segment also includes revenue generated by our owner-operators and some third-party carriers who haul freight for our OEM and contract customers.

Our Brokerage segment revenue is mainly derived from our customers requiring additional transportation needs to haul freight as their current carriers cannot meet their demands. The main factors that affect operating revenue in our Brokerage segment are our customers’ excess inventory needs, the rates we obtain from customers, the freight volumes we ship through our third-party carriers and our ability to secure third-party carriers to transport customer freight. We generally do not have contracted long-term rates for the cost of third-party carriers, and we cannot assure that our results of operations will not be adversely impacted in the future if our ability to obtain third-party carriers changes or the rates of such providers increase.

The most significant expense of our Brokerage segment, which is primarily variable, is the cost of purchased transportation that we pay to third-party carriers and is included in the “Purchased transportation” line item. This expense generally varies depending upon truckload capacity, availability of third-party carriers, rates charged to customers and current freight demand and customer shipping needs. Other operating expenses are generally fixed and primarily include the compensation and benefits of non-driver personnel (which are recorded in the “Salaries, wages and benefits” line item).

The primary performance indicator in our Brokerage segment is operating margin (brokerage operating revenue, less brokerage operating expenses, as a percentage of brokerage operating revenue). Operating margin can be impacted by the rates charged to customers and the costs of securing third-party carriers.

Our Brokerage segment does not require significant capital expenditures and is not asset-intensive like our Truckload segment.

Non-GAAP Financial Measure

We report our financial results in accordance with accounting principles generally accepted in the United States (“GAAP”). However, management believes that EBITDA provides useful information in measuring our operating performance, generating future operating plans and making strategic decisions regarding allocation of capital. Management believes this information presents helpful comparisons of financial performance between periods by excluding the effect of certain non-recurring items.

EBITDA does not have a standardized meaning prescribed by GAAP and therefore it may not be comparable to similarly titled measures presented by other companies, and it should not be considered in isolation from, or as a substitute for, financial information prepared in accordance with GAAP.

EBITDA is defined as net income (loss) for the period adjusted for interest expense, net, income tax expense (benefit) and depreciation and amortization expense.

The following tables provides a reconciliation of net income, the most closely comparable GAAP financial measure, to EBITDA:

Pro forma Results of Operations for Proficient for the Year Ended December 31, 2023 Compared to the Combined Results of Operations of the Founding Companies for December 31, 2022

Please refer to the Unaudited Pro Forma Financial Statements included in this prospectus and to Management’s Discussion and Analysis of Financial Condition and Results of Operations for the Founding Companies below.

Description of Proficient and the Founding Companies

For accounting and reporting purposes, Proficient has been identified as the accounting acquirer of each of the Founding Companies. Proficient Transport has been identified as the accounting predecessor to the Company. The historical operating results, liquidity and capital resource considerations of Proficient and each of the Founding Companies are described below.

Proficient Auto Logistics, Inc.

Overview

Proficient was founded in June 2023 for the purpose of effecting the Combinations. Proficient has no operations at this time and has two officers. During 2023, Proficient incurred various legal, accounting and administrative costs in preparation for this offering, the Combinations and assuring Proficient’s continued viability upon consummation of this offering.

Results of Operations for the Period from June 13, 2023 (Inception) through December 31, 2023

Results of Operations

Revenue — Proficient did not generate any revenue for the period from June 13, 2023 through December 31, 2023.

Operating Expenses — Proficient’s general and administrative expenses for the period from June 13, 2023 through December 31, 2023 totaled $0.6 million. The expenses were incurred for various legal and accounting services in preparation of this offering and the Combinations.

Net Loss — Proficient’s net loss was $0.6 million for the period from June 13, 2023 through December 31, 2023.

Liquidity and Capital Resources

Proficient’s source of funding was capital raises of $0.9 million of cash through December 31, 2023 from a small group of investors. Proficient may obtain additional financing as needed.

Net cash used in operating activities totaled $0.5 million for the period from June 13, 2023 through December 31, 2023, which resulted in $0.4 million of the cash capital raise left on hand as of December 31, 2023.

Proficient Auto Transport, Inc.

Overview

Proficient Transport was founded in 1993 and its primary business is transporting vehicles for automobile manufacturers to their dealers from the manufacturing site, marine port or rail hub. In addition, a portion of Proficient Transport’s revenue is derived from delivering used cars from and to auction companies, leasing companies, automobile dealers, manufacturers, and individuals.

Proficient Transport’s business is primarily conducted in the 48 contiguous states of the United States and is serviced from its nine facilities in five states. Proficient Transport offers its customers a wide range of transportation services by utilizing a diverse fleet of tractors and trailing equipment provided by Proficient Transport, its owner-operators and sub-haulers. Proficient Transport has approximately 140 employees and 26 owner-operators operating 112 company-owned vehicles. Additionally, there are 13 owner-operators utilizing their own equipment and over 500 sub-haulers. Its owner-operators are independent contractors who earn a fee calculated as a percentage of the revenue they generate for Proficient Transport and who bring an entrepreneurial spirit to its business. Proficient Transport’s transportation services are provided through a network of non-union employee drivers, owner-operators, and third-party transportation companies.

Reportable Segments

Proficient Transport’s business is organized into two operating segments, Truckload and Brokerage, which also represent Proficient Transport’s reportable segments. The Truckload segment offers automobile transport and contract services under an asset-based model. Proficient Transport’s contract service offering devotes the use of equipment to specific customers and provides transportation services through long-term contracts. Proficient Transport’s Brokerage segment offers transportation services utilizing an asset-light model focused on outsourcing the transportation of loads to third-party carriers.

Truckload Segment

Proficient Transport’s Truckload segment generates revenue by transporting freight for its customers under its OEM contract arrangements and its contract services arrangements. Proficient Transport’s OEM contract arrangements provide automobile transportation services through movements of freight over routes across the United States. Proficient Transport’s Truckload segment provides services that are geographically diversified but have similar economic and other relevant characteristics, as they all provide truckload carrier services of automobiles. Beginning in 2023, this segment also includes revenue generated by its owner-operators who haul freight for its OEM and contract customers. Though Proficient Transport does not own these vehicles, it does have contracts with the owner-operators in which they lease their vehicles to it, which limits them to hauling only Proficient Transport’s freight under its DOT license.

Proficient Transport is typically paid a predetermined rate per load or per unit for its Truckload services. Proficient Transport’s contract service offering, comprised of approximately 56% and 61% of its Truckload operating revenue, and of approximately 57% and 62% of its Truckload revenue, before fuel surcharge and other reimbursements, for the years ended December 31, 2023, and 2022, respectively. Executed contracts contain fixed terms and rates and are often used by Proficient Transport’s customers with high-service and high-priority freight. Proficient Transport continually strives to increase its revenues derived from contracts as a percentage of total revenue by continuing to build upon its existing relations and acquire new relationships with OEMs.

Proficient Transport’s contracts with customers in the Truckload segment generally include a fuel surcharge to account for fluctuating fuel prices. Built into Proficient Transport’s predetermined contract rates with each customer is a baseline fuel price, and when fuel prices rise above this baseline price, Proficient Transport’s customers compensate it for the variance in the form of additional revenue. If fuel prices drop below the baseline price, Proficient Transport in turn owes its customers this variance and records a discount. This additional revenue/discount is represented on the Fuel Surcharge and Other Reimbursements line in Proficient Transport’s consolidated financial statements. Fuel surcharge revenue mitigates the effect of price increases over the life of the contract; however, these revenues may not fully protect Proficient Transport from all fuel price increases. Conversely, any discount related to a decline in fuel prices mitigates any upside Proficient Transport would otherwise experience from such decline.

The main factors that affect operating revenue in Proficient Transport’s Truckload segment are the average revenue per mile received from Proficient Transport’s customers, the percentage of miles for which Proficient Transport is compensated and the number of vehicles it transports. Proficient Transport’s primary revenue metrics for its Truckload segment are average revenue per loaded mile and average revenue miles per truck per period, in each case excluding fuel surcharge revenue.

In Proficient Transport’s Truckload segment, its most significant operating expenses vary with miles traveled and include (i) fuel, (ii) driver related expenses, such as wages, benefits, training, and recruitment and (iii) owner-operator pay. Expenses that have both fixed and variable components include maintenance and tire expense and Proficient Transport’s total cost of insurance and claims. These expenses generally vary with the miles Proficient Transport’s vehicles travel, but also have a controllable component based on safety, fleet age, efficiency, and other factors. Proficient Transport’s main fixed costs include depreciation of long-term assets, such as trucks and trailers (to which Proficient Transport refers as revenue equipment) and service center facilities, the compensation of non-driver personnel and other general and administrative expenses.

Proficient Transport’s Truckload segment requires substantial capital expenditures for purchase of new revenue equipment. Proficient Transport uses a combination of financing leases and secured long-term debt to acquire revenue equipment. When Proficient Transport finances revenue equipment acquisitions with either finance leases or long-term debt, the assets and liabilities are recorded on its consolidated balance sheet, and it records expenses under “Depreciation and amortization” and “Interest expense.” Proficient Transport’s expects its depreciation and amortization and interest expense will be impacted by changes in the percentage of its revenue equipment acquired in any given year.

Brokerage Segment

In the Brokerage segment, Proficient Transport retains the customer relationship, including billing and collection, and Proficient Transport outsources the transportation of the loads to third-party carriers. For this segment, Proficient Transport relies on brokerage employees to procure spot buy arrangement contracts, as well as information systems to match loads and carriers. This segment also includes revenue generated by certain third-party carriers who haul freight for Proficient Transport’s OEM and contract customers. Through 2022, the segment also included revenue generated by owner-operators who haul freight for Proficient Transport’s OEM and contract customers.

Proficient Transport’s Brokerage segment revenue is mainly derived from its customers requiring additional transportation needs to haul freight as their current carriers cannot meet customer demands. The main factors that affect operating revenue in Proficient Transport’s Brokerage segment are its customers’ excess inventory needs, the rates obtained from customers, the freight volumes Proficient Transport’s ships through its third-party carriers and its ability to secure third-party carriers to transport customer freight. Proficient Transport’s Brokerage segment generally does not have contracted long-term rates for the cost of third-party carriers, and Proficient Transport cannot assure that its results of operations will not be adversely impacted in the future if its ability to obtain third-party carriers changes or the rates of such providers increase.

The most significant expense of Proficient Transport’s Brokerage segment, which is primarily variable, is the cost of purchased transportation that Proficient Transport pays to third-party carriers and is included in the “Purchased transportation” line item. This expense generally varies depending upon truckload capacity, availability of third-party carriers, rates charged to customers and current freight demand and customer shipping needs. Other operating expenses are generally fixed and primarily include the compensation and benefits of non-driver personnel (which are recorded in the “Salaries, wages and benefits” line item).

The primary performance indicator in Proficient Transport’s Brokerage segment is its operating margin (brokerage operating revenue, less brokerage operating expenses, as a percentage of brokerage operating revenue). Operating margin can be impacted by the rates charged to customers and the costs of securing third-party carriers. Proficient Transport’s Brokerage segment does not require significant capital expenditures and is not asset-intensive like its Truckload segment.

Results of Operations for the years ended December 31, 2023 to 2022

The following table sets forth items derived from Proficient Transport’s Consolidated Statements of Comprehensive Income for the years ended December 31, 2023 and 2022 presented as a percentage of operating revenues:

Fiscal year 2023 compared to Fiscal year 2022

Operating Revenue — Proficient Transport generates revenue from two primary sources: transporting freight for its customers (including related fuel surcharge revenue and other reimbursements) and arranging for the transportation of customer freight by third-party carriers. Proficient Transport has two reportable segments: its Truckload segment and its Brokerage segment. Truckload revenue, before fuel surcharges and other reimbursements, is primarily generated through trucking services provided by Proficient Transport’s two Truckload service offerings: OEM transports and contract. Brokerage revenue before fuel surcharges and other reimbursements is primarily generated through brokering freight to third-party carriers. Fuel surcharges and other reimbursements represent additional revenue Proficient Transport earns based on mileage driven and other reimbursable costs incurred for which it is compensated by its customers.

Proficient Transport’s total operating revenue is affected by, among other things, the general level of economic activity in the United States, customer inventory levels, specific customer demand, the level of capacity in the truckload and brokerage industry, the success of our marketing and sales efforts and the availability of drivers and third-party carriers.

Proficient Transport disaggregates revenue from contracts with its customers for Truckload and Brokerage operations between (1) revenue, before fuel surcharges and reimbursements and (2) fuel surcharges and reimbursements. A summary of Proficient Transport’s revenue generated by type for the periods indicated is as follows:

The increases in total operating revenue and revenue before fuel surcharge, were primarily due to the increases in volume of activity (in the Truckload Segment) and secondarily due to increases in Proficient Transport’s contract pricing. In 2023, Proficient Transport delivered 296,352 units (174,434 Truckload Segment) compared to 297,204 units (168,938 in the Truckload Segment) in 2022. The increases in volume in the Truckload Segment were primarily driven by the reduction in backlog of undelivered cars that had built up over 2021 and 2022. In 2021, Proficient Transport’s OEMs experienced significant microchip supply shortages which resulted in new automobiles being only partially manufactured and not ready for shipment. This shortage continued, albeit to a lesser extent, into 2022. Once the microchip supply shortages were resolved, OEMs completed the production of unfinished cars, creating a need to deliver the excess automobile inventory. Proficient Transport serviced the OEMs’ excess inventory through company-owned vehicles as well as Proficient Transport’s Brokerage segment.

In 2023, approximately 81.5% of Proficient Transport’s operating revenue was derived from its four largest customers, General Motors, Glovis (the logistics arm of Hyundai and Kia), Ford and Mercedes Benz.

A summary of Proficient Transport’s revenue generated by segment for the periods indicated is as follows:

In the Truckload segment, operating revenues increased by $3.8 million, or 9.7%, to $43.4 million in 2023 compared to $39.6 million in 2022. Average revenue per unit increased to $220 from $197 in 2022. The increase in the Truckload segment’s revenue was driven by a $5.2 million increase in truckload services and a $1.4 million decrease in fuel surcharges and other reimbursements. The $5.2 million increase in truckload services was comprised of contractual increases in revenue per unit hauled and the utilization of additional owner operators. The decrease in Proficient Transport’s Truckload fuel surcharge and other reimbursements primarily related to the decrease in fuel prices, which resulted in lower fuel surcharge compensation from Proficient Transport’s customers, as well as fewer reimbursements Proficient Transport earned from the contracts that expired mid-year.

In the Brokerage segment, operating revenues increased by $1.7 million, or 1.9%, to $92.4 million in 2023 compared to $90.6 million in 2022. The increase in the Brokerage segment’s revenue was driven by a $5.1 million increase in brokerage services offset by a $3.4 million decrease in fuel surcharges and other reimbursements. The primary factors driving the increase in brokerage services revenue was Proficient Transport’s ability to expand services under its contract service arrangements to third-party carriers as well as the need for timely transportation of the excess inventory of Proficient Transport’s OEMs.

Salaries, wages and benefits — Salaries, wages, and benefits consist primarily of compensation for all employees. Salaries, wages, and benefits are primarily affected by the amount paid to company drivers, which is a function of the amount of freight hauled and includes units delivered. Salaries, wages and benefits are also affected by employee benefits such as health care and workers’ compensation, and to a lesser extent by the number of, and compensation and benefits paid to, non-driver employees.

Salaries, wages and benefits decreased by $2.5 million, or 10.7%, to $20.4 million in 2023 compared to $22.9 million in 2022. The decrease is primarily related to Proficient Transport’s smallest contract expiring in June of 2023, which resulted in the termination of approximately 30 drivers. Additionally, approximately 20 drivers transitioned from company drivers to owner-operators during 2023.

Fuel and fuel taxes — Fuel and fuel taxes consist primarily of diesel fuel expense and fuel taxes for Proficient Transport’s company-owned equipment. The primary factors affecting Proficient Transport’s fuel and fuel taxes expense are the cost of fuel per mile and the number of miles driven by company drivers.

Fuel and fuel taxes decreased by $2.7 million, or 38.2%, to $4.5 million in 2023 compared to $7.2 million in 2022. The decrease in fuel and fuel taxes was driven primarily by the decrease in price per gallon for diesel fuel, which declined from an annual average of $4.99 per gallon in 2022 to $4.21 per gallon in 2023, according to the Department of Energy. For 2023, the average cost of fuel per mile was $0.79 compared to $1.11 in 2022 and the total number of miles driven in 2023 was 10 million compared to 9.2 million in 2022. Additionally, the expiration of Proficient Transport’s smallest fleet contract mid-year resulted in less fuel being purchased in 2023.

Purchased transportation — Purchased transportation consists of the payments Proficient Transport makes to owner-operators and third-party carriers.

Purchased transportation increased by $13.5 million, or 19.2%, to $83.8 million in 2023 compared to $70.3 million in 2022. The increase in purchased transportation was driven by two factors: Proficient Transport had approximately 20 company drivers become owner-operators during 2023 and Proficient Transport added third-party carriers to its contract service arrangement.

Truck Expenses — Truck expenses consist of operating expenses and supplies incurred for ordinary vehicle repairs and maintenance costs, driver on-the-road expenses and tolls.

Operating expenses and supplies are primarily affected by the age of Proficient Transport’s company-owned and leased fleet of trucks and trailers, the number of miles driven in a period and driver turnover. Truck expenses decreased 0.4% to $7.0 million in 2023 compared to $7.1 million in 2022. Truck expenses as a percentage of operating revenue decreased from 5.4% in 2022 to 5.2% in 2023 due to the disproportional increase in Brokerage segment activity, which operates under an asset-light model and does not incur truck expenses.

Depreciation and amortization — Depreciation and amortization consist primarily of depreciation for owned trucks and trailers and to a lesser extent computer software amortization. The primary factors affecting these expense items include the size and age of Proficient Transport’s truck and trailer fleets, the cost of new equipment and the relative percentage of owned revenue equipment and equipment acquired through debt or finance leases.

Depreciation and amortization and the gain on sale of equipment increased by $0.1 million, or 4.9%, to $2.3 million in 2023 compared to $2.2 million in 2022. The increase in depreciation and amortization and the gain on sale of equipment was driven by an increase in the average depreciation offset by gains recognized on sold equipment.

Insurance premiums and claims — Insurance premiums and claims consist primarily of retained amounts for liability (personal injury and property damage), physical damage and cargo damage, as well as insurance premiums. The primary factors affecting Proficient Transport’s insurance premiums and claims are the frequency and severity of accidents, trends in the development factors used in Proficient Transport’s actuarial accruals and developments in large, prior year claims. The number of accidents tends to increase with the miles we travel. With our significant retained amounts, insurance claims expense may fluctuate significantly and impact the cost of insurance premiums and claims from period-to-period, and any increase in frequency or severity of claims or adverse loss development of prior period claims would adversely affect Proficient Transport’s financial condition and results of operations.

Insurance premiums and claims increased by $0.6 million, or 23.8%, to $3.2 million in 2023 compared to $2.6 million in 2022. The increase in insurance premiums and claims was driven by an increase in Proficient Transport’s premiums.

Operating taxes and licenses — Operating taxes and licenses consist of property and use taxes. Operating taxes and licenses increased by $114,599 or 83.5%, to $251,789 in 2023 compared to $137,190 in 2022. The increase in operating taxes and licenses was driven by the increase in operating revenue.

General, selling, and other operating expenses — General, selling, and other operating expenses consist primarily of legal and professional services fees, general and administrative expenses, and other costs. General, selling, and other operating expenses increased by $0.8 million, or 27.6%, to $3.9 million in 2023 compared to $3.0 million in 2022. The increase in general, selling, and other operating expenses was primarily due to increased legal fees, as well as the overall increase in general expenses such as repairs and maintenance at our owned facility, operations, and utilities.

Interest expense, net — Interest expense, net consists of cash interest, amortization of deferred financing fees, net of any interest income received from financial institutions. Interest expense, net decreased by $0.2 million, or 18.0%, to $1.0 million in 2023 compared to $1.2 million in 2022. The decrease was primarily due to the interest income earned from the Lease to Purchase program with our owner-operators.

Operating ratio — Operating ratio is calculated as total operating expenses as a percentage of operating revenue. Proficient Transport’s operating ratio increased by 3.7% to 92.4% in 2023 as compared to 88.7% in 2022. The increase in costs was primarily due to the increase in purchase transportation activity in Proficient Transport’s Brokerage segment.

EBITDA — EBITDA decreased by $4.1 million, or 24.2%, to $12.9 million in 2023 compared to $17.0 million in 2022. The decrease was primarily due to the $3.2 million decrease in net income as well as the $0.9 million decrease in income taxes, which is an add back for the EBITDA calculation. See “Non-GAAP Financial Measure” section below for Proficient Transport’s calculation of EBITDA.

Non-GAAP Financial Measure

EBITDA

EBITDA is a supplemental non-GAAP financial measure used by management of Proficient Transport. Proficient Transport defines EBITDA as net income (loss) before (i) interest expense, net, (ii) tax expense (benefit), and (iii) depreciation and amortization expense. Proficient Transport believes that EBITDA is useful because it provides a more effective evaluation of Proficient Transport’s operating performance and allows comparison of Proficient Transport’s results of operations from period to period without regard to Proficient Transport’s financing methods or other items that impact comparability of financial results from period to period such as fluctuations in interest expense or effective tax rates, levels of depreciation and amortization, or any unusual items. EBITDA should not be considered as an alternative to, or more meaningful than, net income, operating ratio, or any other measure as determined in accordance with GAAP. Proficient Transport’s computation of EBITDA may not be comparable to EBITDA of other companies. Proficient Transport presents EBITDA because management believes these metrics provide useful information regarding the factors affecting Proficient Transport’s operations.

The following table presents a reconciliation of EBITDA to the GAAP financial measure of net income for each of the periods indicated.

The increases in total operating revenue and revenue, before fuel surcharge and other reimbursements, were primarily due to the increases in volume of activity and secondarily due to increases in Proficient Transport’s contract pricing. In 2022, Proficient Transport delivered 297,204 units compared to 194,247 in 2021. In particular, in early 2021, Proficient Transport’s OEMs experienced significant microchip supply shortages, which resulted in new automobiles being only partially manufactured and not ready for shipment. The lower levels of shipping resulted in lower operating revenue in early 2021. Later in 2021, and continuing into 2022, the microchip shortages were resolved. Once the microchip supply shortages were resolved, OEMs completed the production of unfinished cars and ended up with excess inventory of automobiles that needed to be delivered. Proficient Transport serviced the OEMs’ excess inventory through company-owned vehicles as well as the Brokerage segment.

In 2022, approximately 79% of Proficient Transport’s operating revenue was derived from its four largest customers: General Motors, Mercedes Benz, Glovis (the logistics arm of Hyundai and Kia) and Ford.

A summary of Proficient Transport’s revenue generated by segment for the periods indicated is as follows:

In the Truckload segment, operating revenues increased by $5.7 million, or 16.7%, to $39.6 million in 2022 compared to $33.9 million in 2021. Average revenue per unit in 2022 increased slightly to $197 from $196 in 2021. The increase in the Truckload segment’s revenue was driven by a $3.6 million increase in truckload services and a $2.1 million increase in fuel surcharges and other reimbursements. The primary factors affecting the increase in truckload services were Proficient Transport’s ability to secure price increases in its predetermined contract rates as well as a full year of servicing a new contract service arrangement it obtained in 2021. The increase in Truckload fuel surcharge and other reimbursements primarily related to the rise in fuel prices which resulted in higher fuel surcharge compensation from Proficient Transport’s customers.

In the Brokerage segment, operating revenues increased by $61.4 million, or 210.8%, to $90.6 million in 2022 compared to $29.1 million in 2021. The increase in the Brokerage segment’s revenue was driven by a $55.3 million increase in brokerage services and a $6.2 million increase in fuel surcharges and other reimbursements. The primary factors driving the increase in Brokerage revenue were Proficient Transport’s ability to expand its services under its contract service arrangements to third-party carriers as well as the need for timely transportation of excess inventory of Proficient Transport’s OEMs. Proficient Transport also at times receives fuel surcharge and other reimbursements on freight hauled by third-party carriers, which increased in 2022 compared to 2021 due to a rise in fuel prices resulting in higher fuel surcharge compensation from customers.

Salaries, wages and benefits — Salaries, wages and benefits increased by $4.9 million, or 26.9%, to $22.9 million in 2022 compared to $18.0 million in 2021. The increase was due primarily to (i) higher driver wages, which was the result of increased company driver miles, with an increase in driver pay per mile, and an increase in office wages to support the increased activity and revenue and (ii) an increase in the number of employees due to growth. In addition, group health and workers’ compensation expense increased due to increased group health claims expense combined with an increase in workers’ compensation premiums.

Fuel and fuel taxes — Fuel and fuel taxes increased by $2.4 million, or 51.2%, to $7.2 million in 2022 compared to $4.8 million in 2021. The increase in fuel and fuel taxes was driven primarily by the increase in price per gallon for diesel fuel, which increased from an annual average of $3.29 per gallon in 2021 to $4.99 per gallon in 2022, according to the Department of Energy. For 2022, the average cost of fuel per mile was $1.11 compared to $0.58 in 2021 and the total number of miles driven in 2022 was 9.2 million compared to 10.7 million in 2021.

Purchased transportation — Purchased transportation increased by $46.5 million, or 195.1%, to $70.3 million in 2022 compared to $23.8 million in 2021. The increase in purchased transportation was driven by the addition of third-party carriers used in the expansion of Proficient Transport’s contract service arrangements and an increase in demand from customers whose current carriers could not fulfill their freight requirements.

Truck Expenses — Truck expenses increased by $0.7 million, or 10.9%, to $7.1 million in 2022 compared to $6.4 million in 2021. The increase in truck expenses was primarily driven by increased maintenance services on existing and new trucks. However, truck expenses as a percentage of operating revenue decreased from 10.1% in 2021 to 5.4% in 2022 due to the disproportional increase in Brokerage segment activity, which operates under an asset-light model and does not incur truck expenses.

Depreciation and amortization, net of gain on sale of equipment — Depreciation and amortization, net of gain on sale of equipment increased by $0.1 million, or 0.6%, to $2.3 million in 2022 compared to $2.3 million in 2021. The increase in depreciation and amortization was driven by an increase in the average depreciation offset by lower gains recognized on sold equipment.

Insurance premiums and claims — Insurance premiums and claims decreased by $0.2 million or 5.2%, to $2.6 million in 2022 compared to $2.7 million in 2021. The decrease in insurance premiums and claims was driven by a reduction in the number of auto liability claims filed and enhancement made to our training and safety programs, partially offset by an increase in insurance premiums.

Operating taxes and licenses — Operating taxes and licenses consists of property and use taxes. Operating taxes and licenses increased by $19,913, or 17.0%, to $137,190 in 2022 compared to $117,277 in 2021. The increase in operating taxes and licenses was driven by the increase in operation revenue.

General, selling, and other operating expenses — General, selling, and other operating expenses increased by $0.5 million, or 20.2%, to $3.0 million in 2022 compared to $2.5 million in 2021. The increase in general, selling, and other operating expenses was primarily due to increased legal fees, as well as the overall increase in general expenses such as repairs and maintenance at our owned facility, operations, and utilities.

Gain on forgiveness of Paycheck Protection Program loan — Gain on forgiveness of the Paycheck Protection Program loan decreased by $2.1 million, or 100.0% to $0 in 2022 compared to $2.1 million in 2021. The decrease was due to Proficient Transport receiving a one-time loan forgiveness permitted by the Small Business Administration in 2021.

Interest expense, net — Interest expense, net increased by $38,212, or 3.4%, to $1.2 million in 2022 compared to $1.1 million in 2021. The increase was primarily due to the increase in borrowings in 2022 as well as increasing interest rates on Proficient Transport’s line of credit.

EBITDA — EBITDA increased by $10.1 million, or 145.5%, to $17.0 million in 2022 compared to $6.9 million in 2021. The increase was primarily due to the $7.2 million increase in net income as well as the $2.8 million increase in income taxes, which is an add back for the EBITDA calculation. The following table presents a reconciliation of EBITDA to the GAAP financial measure of net income for each of the periods indicated.

Operating ratio — Operating ratio is calculated as total operating expenses as a percentage of operating revenue. Our operating ratio decreased by 7.3% to 88.7% in 2022 as compared to 96.0% in 2021. The decrease in operating ratio year-over-year is attributable to the operating leverage of fixed expenses in combination with a material increase in operating revenue for this segment.

Liquidity and Capital Resources

Overview

Proficient Transport’s business requires substantial amounts of cash to cover operating expenses as well as to fund capital expenditures, working capital changes, principal and interest payments on Proficient Transport’s obligations, lease payments and tax payments when Proficient Transport generates taxable income. Recently, Proficient Transport has financed its capital requirements with borrowings under its credit facility, cash flows from operating activities, direct equipment financing, and proceeds from equipment sales. Proficient Transport intends to purchase approximately ten tractors and trailers in the coming year and plans to finance the purchases through a combination of operating cash flows and direct equipment financing.

Proficient Transport believes it can fund its expected cash needs in the short-term, including debt repayment and the capital purchases described above, with projected cash flows from operating activities, borrowings under its credit facility and direct debt and lease financing it believes to be available for at least the next 12 months. Over the long-term, Proficient Transport expects that it will continue to have significant capital requirements, which may require Proficient Transport to seek additional borrowings or lease financing. The availability of financing will depend upon Proficient Transport’s financial condition and results of operations as well as prevailing market conditions.

Sources of liquidity

Proficient Transport has a revolving line of credit with a financial institution that allows Proficient Transport to borrow up to $18.0 million, subject to a borrowing base calculation of qualified accounts receivable plus qualified rolling stock, as defined in the revolving line of credit agreement. As of December 31, 2023 and December 31, 2022, Proficient Transport had an outstanding balance on a revolving line of credit of $3.5 million and $6.3 million, respectively. Interest is payable monthly at the Prime Rate plus 0.75% per annum, but no less than 4% per annum (9.25% as of December 31, 2023). Borrowings against the line of credit are secured by all of Proficient Transport’s assets. In February 2024, Proficient Transport amended the revolving line of credit, extending the maturity date to March 30, 2025. The line of credit requires Proficient Transport to comply with certain restrictive covenants, including but not limited to a debt service coverage ratio, a minimum tangible net worth plus subordinated debt, and a liabilities to tangible net worth plus subordinated debt ratio. The February 2024 amendment to the revolving line of credit includes a $3.0 million advance to fund the litigation settlement described in Footnote 17 of the notes to Proficient Transport’s consolidated financial statements included elsewhere in this prospectus. Additionally, the amendment waived the covenant default for judgments in excess of $25,000 and waived the reporting default by extending the due date for the audited consolidated financial statements.

Cash Flows

Proficient Transport’s summary statements of cash flows for the periods indicated are set forth in the table below:

Operating Activities

In 2023, Proficient Transport generated cash flows from operating activities of $10.7 million, a $4.8 million increase compared to 2022. The increase was primarily due to a decrease in accounts receivable of $6.7 million as well as the deferral of the $3.0 million settlement liability to 2024. The increase in cash flow from operating activities was offset by a decrease in net income of $3.2 million.

Investing Activities

In 2023, Proficient Transport generated cash flows from investing activities of $0.2 million, an increase of $0.6 million compared to 2022. The increase was primarily due to the increase in proceeds from the sale of equipment of $0.5 million compared to 2022.

Financing Activities

In 2023, Proficient Transport used $10.9 million in cash flows from financing activities, an increase of $5.4 million compared to 2022. The increase was primarily due to Proficient Transport paying a $5.0 million dividend to Series A Preferred Stockholders in 2023. Additionally, Proficient Transport had repayments of long-term debt and finance lease obligations of $3.1 million and $2.0 million for the years ended December 31, 2023, and 2022, respectively. These payments were offset by proceeds from the line of credit increasing by $15.8 million while repayments only increased by $15.1 million.

Working Capital

As of December 31, 2023, Proficient Transport had working capital of $8.1 million, a decrease of $1.0 million compared to $9.1 million in 2022. The decrease in working capital was largely due to a $1.5 million increase in accrued liabilities to $7.8 million in 2023 compared to $6.3 million in 2022, as well as an increase in the current portion of long-term debt of $0.7 million to $1.6 million in 2023 compared to $0.9 million in 2022. The decrease was offset by a $1.3 million increase in accounts receivable to $19.8 million in 2023 compared to $18.5 million in 2022.

Contractual obligations

The table below summarizes Proficient Transport’s contractual obligations as of December 31, 2023:

____________

(1)      Includes interest obligation on finance lease obligations.

(2)      Proficient Transport leases certain buildings under long-term, non-cancelable operating lease agreements expiring at various dates through 2024.

Inflation and Fuel Cost

Most of Proficient Transport’s operating expenses are inflation-sensitive, with inflation generally producing increased costs of operations. Historically, Proficient Transport has limited the effects of inflation on its business through increases in freight rates and certain cost controls. The most relevant items impacted by inflation to Proficient Transport are the cost to insure and maintain the fleet. Significant inflation has been experienced in insurance and claims costs related to health insurance and claims as well as auto liability insurance and claims. Significant price increases in revenue equipment have impacted the cost for Proficient Transport to acquire new equipment, while there has been a corresponding inflationary impact to prices offered on the sale of its used equipment. The cost increases have also impacted the cost of parts for equipment repairs and maintenance, inclusive of tires. Despite the increased cost to insure and maintain the fleet, the expense to Proficient Transport was unchanged as a percentage of total revenue from the fiscal year ended December 31, 2022 to December 31, 2023; thus, the impact on Proficient Transport’s operating ratio (operating income divided by operating revenue) and net profit has been immaterial. Over the long term, general economic growth and industry supply and demand conditions have allowed rate increases, although these rate increases have significantly lagged the increases in tractor prices and related depreciation expense.

In addition to inflation, significant fluctuations in fuel prices can adversely affect Proficient Transport’s operating results and profitability. Proficient Transport has attempted to limit the effects of increases in fuel prices through certain cost control efforts and its fuel surcharge program. Proficient Transport receives fuel surcharges on all Truckload accounts. Although Proficient Transport historically has been able to pass through most long-term increases in fuel prices and operating taxes to customers in the form of surcharges and higher rates, these arrangements generally do not fully protect Proficient Transport from short-term fuel price increases or continued rising price environments like Proficient Transport experienced throughout 2022 and 2023. These arrangements may also prevent Proficient Transport from receiving the full benefit of any fuel price decreases. Additionally, Proficient Transport generally does not receive fuel surcharge on empty miles.

Insurance claims and accruals

Proficient Transport retains high deductibles on a significant portion of its claims exposure and related expenses associated with third party bodily injury and property damage, employee medical expenses and workers’ compensation, physical damage to its equipment and cargo loss. Proficient Transport currently carries the following material types of insurance, which generally have maximum benefits per claim and other limitations as noted below:

•        Commercial auto liability coverage; approximately $1.0 million of coverage per occurrence with deductible of $50,000 per occurrence.

•        Employer’s excess auto liability coverage; we had a $9.0 million in aggregate coverage.

•        Cargo damage coverage; coverage ranging from $350,000 to $2.0 million of coverage per occurrence with deductibles ranging from $5,000 to $10,000 per occurrence.

•        General liability and physical damage liability; coverage ranges from $195,000 to $1.0 million per occurrence.

•        Worker’s compensation liability; deductible of $500,000 with statutory coverage limits equal to $1.0 million.

•        Employee healthcare; deductible of $125,000 per individual with a stop loss insurance of $1.0 million.

Critical Accounting Policies and Estimates

In the ordinary course of business, Proficient Transport has made a number of estimates and assumptions relating to the reporting of results of operations and financial position in the preparation of its financial statements in conformity with generally accepted accounting principles (“GAAP”). Actual results could differ significantly from those estimates under different assumptions and conditions. Proficient Transport believes that the following discussion addresses its most critical accounting policies, which are those that are most important to the portrayal of its financial condition and results of operations and require management’s most difficult, subjective and complex judgments, often as a result of the need to make estimates about the effect of matters that are inherently uncertain. See Note 2 of the accompanying consolidated financial statements for additional information about its critical accounting policies and estimates.

Accounts Receivable

Accounts receivable represents customer obligations due under normal trade terms. Proficient Transport reviews accounts receivable on a continuing basis to determine if any receivables are potentially uncollectible. Proficient Transport writes off uncollectible receivables based on specifically identified amounts determined to be uncollectible. Based on the information available, Proficient Transport recorded an allowance for credit losses of approximately $634,913 and $342,576 at December 31, 2023 and 2022, respectively. Actual write-offs could differ from management’s estimate.

Property and equipment

Property and equipment are carried at cost. Depreciation of property and equipment is computed using the straight-line method for financial reporting purposes and accelerated methods for tax purposes over the estimated useful lives of the related assets (net of estimated salvage value or trade-in value). Proficient Transport generally uses estimated useful lives of five to ten years for trucks and trailers, classified as transportation equipment. The depreciable lives of its revenue generating equipment represent the estimated usage period of the equipment, which is generally substantially less than the economic lives. The residual value of a substantial portion of its equipment is covered by repurchase or trade agreements between Proficient Transport and the equipment manufacturer.

Periodically, Proficient Transport evaluates the useful lives and salvage values of its revenue generating equipment and other long-lived assets based upon, but not limited to, its experience with similar assets, including gains or losses upon dispositions of such assets, conditions in the used equipment market and prevailing industry practices. Changes in the useful lives or salvage value estimates, or fluctuations in market values that are not reflected in its estimates, could have a material impact on its financial results. Further, if its equipment manufacturer does not perform under

the terms of the agreements for guaranteed trade-in values, such non-performance could have a materially negative impact on financial results. Proficient Transport reviews its property and equipment whenever events or circumstances indicate the carrying amount of the asset may not be recoverable. An impairment loss equal to the excess of carrying amount over fair value would be recognized if the carrying amount of the asset is not recoverable.

Income taxes

Income taxes are accounted for under the asset-and-liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statements carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized as income or expense in the period that includes the enactment date.

Proficient Transport evaluates the need for a valuation allowance on deferred tax assets based on whether it believes that it is more likely than not all deferred tax assets will be realized. A consideration of future taxable income is made as well as on-going prudent feasible tax planning strategies in assessing the need for valuation allowances. In the event it is determined all or part of a deferred tax asset would not be able to be realized, management would record an adjustment to the deferred tax asset and recognize a charge against income at that time.

Proficient Transport’s estimate of the potential outcome of any uncertain tax issue is subject to its assessment of relevant risks, facts and circumstances existing at that time. Proficient Transport accounts for uncertain tax positions in accordance with Accounting Standards Codification (“ASC”) 740, Income Taxes, and records a liability when such uncertainties meet the more likely than not recognition threshold. Potential accrued interest and penalties related to unrecognized tax benefits are recognized as a component of income tax expense.

New Accounting Pronouncements

See Note 1 of the consolidated financial statements for a full description of recent accounting pronouncements and the respective dates of adoption and effects on results of operations and financial position.

Delta Automotive Services, Inc.

Results of Operations for the years ended December 31, 2023 to 2022

Operating Revenue — Total operating revenue for the year ended December 31, 2023 increased by $10.5 million, or 23.5%, to $55.1 million as compared to the year ended December 31, 2022. The increase was primarily a result of a $5.6 million increase in Truckload revenue and a $4.9 million increase in Brokerage revenue. In 2023, revenue from fuel surcharge was $2.0 million, which accounts for 4% of total revenue.

The revenue mix between Delta’s company-owned trucks (Truckload) versus sub-haulers (Brokerage) shifted by 2% in 2023 as a percentage of total revenue. Brokerage revenue was $16.0 million for the year ended December 31, 2022, but grew to $21.0 million for the year ended December 31, 2023.

In 2023, nine customers accounted for 81.4% of Delta’s revenue, including BMW (22.8%), VW (12.5%), Mercedes Benz (13.2%), Jaguar/Land Rover (11.9%) and Stellantis (new customer) (19.1%). Delta moved approximately 164,000 units in 2023 as compared to approximately 151,000 units in 2022, for a volume gain of 8.5%.

Salaries, wages and benefits — Salaries, wages and benefits increased by $2.3 million, or 19.6%, to $14.1 million in 2023 compared to $11.8 million in 2022.

Driver wages for the years ended December 31, 2023 and 2022 were $10.3 million and $7.6 million, respectively, inclusive of seniority and performance bonuses for drivers. This cost represented 30% of truck revenues for the year ended December 31, 2023 and 28% in 2022.

Fuel and fuel taxes — Fuel and fuel taxes improved to 17% of truck revenue in 2023 as compared to 20% in 2022. This reduction was primarily caused by the stabilization of fuel prices in 2023 as compared to 2022.

Purchased Transportation — Purchased transportation increased by $4.9 million, or 47.6%, to $15.3 million in 2023 compared to $10.4 million in 2022. The increase was primarily caused by the increased activity from sub-haulers in 2023 as compared to 2022. The increase in purchased transportation aligns with the increase in revenue from sub-haulers in 2023, as compared to 2022.

Truck expenses — Truck expenses decreased by $0.1 million to $2.2 million in 2023 compared to $2.3 million in 2022 despite the increased activity in 2023. The decrease was primarily caused by Delta’s rigid maintenance program at its truck repair facility to limit the amount of truck repairs cost.

Depreciation and amortization — Depreciation and amortization increased by $0.5 million, or 9.7%, to $6.0 million in 2023 compared to $5.5 million in 2022. The increase was primarily caused by the deprecation on newly acquired assets.

Insurance claims and premium — Insurance claims and premium increased by $0.7 million, or 27% to $3.4 million in 2023 compared to $2.7 million in 2022. The increase was primarily due to the increase in activity and the increased number of new units. Delta had 106 truck/tractors in 2023 while it had 85 in 2022.

Operating taxes and licenses — Operating taxes and licenses increased by $0.5 million, or 24.4%, to $2.3 million in 2023 as compared to $1.8 million in 2022. The higher expenditures were brought about by increased operating activities.

General, selling, and other operating expenses — General, selling, and other operating expenses increased by $1.1 million to $2.0 million in the year ended December 31, 2023 compared to 2022. The increase was primarily caused by increased support for the revenue generating activities in 2023 as compared to 2022. One-time professional charges incurred by Delta related to the Combinations of $0.8 million contributed to this increase.

Interest expenses, net — Interest expenses, increased by $0.3 million, or 32.6%, to $1.1 million in 2023 compared to $0.9 million in 2022. The increase was primarily caused by the new truck additions in 2023 as well as increased financing cost.

EBITDA — EBITDA increased by $1.1 million, or 10.4% to $11.4 million in 2023 compared to $10.3 million in 2022.

Results of Operations for the years ended December 31, 2022 to 2021

Operating Revenue — Total operating revenue for the year ended December 31, 2022 increased by $11.1 million, or 33.5%, to $44.6 million as compared to the year ended December 31, 2021. The increase was primarily a result of a $4.5 million increase in Truckload revenue and a $6.6 million increase in Brokerage revenue. In 2022, revenue from fuel surcharge was $3.6 million, which accounts for 8.1% of total revenue.

In 2022, the automobile industry continued to stabilize following the COVID-19 pandemic and the supply chain challenges in 2020 and 2021. Price increases from OEMs in the latter half of 2022 drove revenue increases and increased gross margin.

The revenue mix between company-owned trucks (Truckload) versus sub-haulers (Brokerage) dramatically shifted in 2022. Brokerage revenue was $9.5 million for the year ended December 31, 2021, but grew to $16.1 million for the year ended December 31, 2022.

In 2022, 5 customers accounted for 72.3% of Delta’s revenue, including BMW (24.3%), VW (18.6%), Mercedes Benz (12.2%), Jaguar/Land Rover (11.2%) and Stellantis (6.0%). Delta moved roughly 151,000 units in 2022 as compared to 145,000 units in 2021, for a volume gain of 4%.

Salaries, wages and benefits — Salaries, wages and benefits increased by $0.7 million or 6%, to $11.7 million in 2022 compared to $11.0 million in 2021. Driver wages for the years ended December 31, 2022 and 2021 were $7.6 million and $6.6 million, respectively, inclusive of seniority and performance bonuses for drivers. This cost was 27% of truck revenues for each of the years ended December 31, 2022 and 2021.

Fuel and fuel taxes — Fuel and fuel taxes increased by $2.1 million, or 54.8%, to $6.0 million in 2022 compared to $3.9 million in 2021. The increase in fuel and fuel taxes was primarily caused by the increase in diesel fuel costs throughout 2022 as compared to 2021.

Purchased transportation — Purchased transportation increased by $2.5 million, or 32.1%, to $10.4 million in 2022 compared to $7.9 million in 2021. The increase was primarily caused by the increased activity from sub-haulers in 2022 as compared to 2021. The increase in purchased transportation aligns with the increase in revenue from sub-haulers in 2022, as compared to 2021.

Truck expenses — Truck expenses increased by $0.2 million, or 9.7%, to $2.3 million in 2022 compared to $2.1 million in 2021. The increase in truck expenses was primarily caused by increased truck repair and maintenance costs as a result of the increase in activity. We maintain a rigid maintenance program at our truck repair facility to limit the amount of truck repairs cost.

Depreciation and amortization, net of gain on sale of equipment — Depreciation and amortization, net of gain on sale of equipment decreased by $1.4 million, or 27.0%, to $3.7 million in 2022 compared to $5.1 million in 2021. The decrease was primarily caused by the periodical sales of older equipment at the end of their useful lives.

Insurance claims and premiums — Insurance claims and premiums increased by $0.1 million, or 4.3%, to $2.8 million in 2022 compared to $2.7 million in 2021. The increase was primarily due to the increase in activity, offset by our negotiations with our brokers for more economical premiums.

Operating taxes and licenses — Operating taxes and licenses decreased by $34,935, or 10.4%, to $302,539 in 2022 as compared to $0.3 million in 2021.

General, selling, and other operating expenses — General, selling, and other operating expenses increased by $0.4 million, or 16.5%, to $2.6 million in 2022 compared to $2.2 million in 2021. The increase was primarily caused by increased support for the revenue generating activities in 2022 as compared to 2021.

Interest expenses, net — Interest expenses, net decreased by $0.3 million, or 25.7%, to $0.9 million in 2022 compared to $1.2 million in 2021. The decrease was primarily caused by the reduction in new truck additions in 2022 as compared to 2021, requiring less debt financing.

EBITDA — EBITDA increased by $4.4 million, or 74.8%, to $10.3 million in 2022 compared to $5.9 million in 2021. The increase was primarily caused by the $4.7 million increase in net income.

Liquidity and Capital Resources

Delta added 32 units to its truck fleet in 2023 at an aggregate cost of $11.5 million, while it disposed of ten older units and lost one through theft. Total truck count in 2023 was 106 units, an increase of 21 units as compared to 2022.

As of December 31, 2023 and 2022, Delta had total debt related to truck purchases of $21.4 million and $18.5 million, respectively. Delta’s loans had an average interest rate of 6.75% as of December 31, 2023 as compared to 6.5% in 2022.

For the year ended December 31, 2023, Delta generated cash from operating activities of $7.8 million, a $0.2 million increase as compared to the year ended December 31, 2022. The increase was primarily due to an increase in net income in 2023.

Cash flow from investing activities decreased cash by $2.0 million for the year ended December 31, 2023, primarily attributable to the cash purchase of six units, taking advantage of available cash and to avoid high interest costs.

Cash flow used in financing activities was $6.1 million for the year ended December 31, 2023 as compared to $7.2 million the year ended December 31, 2022. For the year ended December 31, 2023, substantially all of the amount was due to principal payments of long-term debt obligations. For the year ended December 31, 2022, $6.3 million was used for the principal payments of long-term debt obligations.

Deluxe Auto Carriers, Inc.

Results of Operations for the years ended December 31, 2023 to 2022

Operating revenue — Total transportation revenue for the year ended December 31, 2023 increased by $18.2 million to $94.7 million as compared to 2022. The increase was primarily a result of new contract wins, increased auto deliveries from existing contracts and price increases. In 2023, a substantial portion of Deluxe’s net revenue was derived from three customers, General Motors, BMW and VW, which collectively were 65% of Deluxe’s total net revenue.

A summary of Deluxe’ s revenue generated for the periods indicated is as follows:

Operating income for the year ended December 31, 2023 was $2.2 million as compared to operating income of $2.0 million for the same period in 2022. The primary factors driving the increase were increased revenue from operations and price increases, primarily offset by increases in purchased transportation related to an increase in the number of company trucks and drivers compared to sub-haulers.

Truck sale revenue in the year ended December 31, 2023 fell to a de minimis amount compared to 2022 and was related to the sale of older trucks.

Operating Expense

Salaries, wages, and benefits and general, selling, and other operating expenses — Salaries, wages, and benefits and general, selling, and other operating expenses for the year ended December 31, 2023 were $22.0 million as compared to $20.0 million for 2022. The increase in compensation and general, selling and other operating expenses were purely a function of increased staff to service the increased revenue.

Depreciation and amortization — Depreciation and amortization for the year ended December 31, 2023 was $5.6 million as compared to $6.2 million for 2022. The decrease was primarily a result of truck sales, while waiting for the new trucks on order to be delivered.

Interest expense — Interest expense for the year ended December 31, 2023 was $0.7 million as compared to $0.9 million for 2022. In 2023, interest expense declined due to reduction in Deluxe’ s loan balances as a result of loan payments and decreased purchases of new fleet units.

Net Income — Net Income for the year ended December 31, 2023 was $1.4 million as compared to net income of $5.9 million in 2022. The decrease was primarily attributable to a combination of having no truck sales in 2023 and no Employee Retention Credit income as compared to 2022.

Results of Operations for the years ended December 31, 2022 to 2021

Operating revenue — Operating Revenue increased by $16.7 million, or 28.1%, to $76.5 million for the year ended December 31, 2022 as compared to $59.7 million in 2021.

Truckload revenue increased by $19.4 million, or 32.9%, to $74.9 million for the year ended December 31, 2022 as compared to $58.7 million for the year ended December 31, 2021. The increase was primarily a result of new contract wins, increased vehicle deliveries from existing contracts, price increases and fuel surcharge increases.

Purchased Transportation — Purchased transportation increased by $10.0 million, or 45.5%, to $32.0 million for the year ended December 31, 2022 as compared to $22.0 million in 2021. The increase was primarily caused by the increase in volume of activity that was serviced through the use of sub-haulers in 2022 compared to 2021.

Salaries, wages and benefits — Salaries, wages and benefits increased by $2.5 million, or 16.6%, to $17.5 million for the year ended December 31, 2022 as compared to $15.0 million in 2021. The increase was primarily due to an increase in driver wages as well as an increase in administrative salaries to assist with the increase in activity.

Fuel and fuel taxes — Fuel and fuel taxes increased by $2.0 million, or 27.3%, to $9.3 million for the year ended December 31, 2022 as compared to $7.3 million in 2021. The increase was primarily due to an increase in operating activity exacerbated by an increase in diesel fuel costs in 2022 as compared to 2021.

Depreciation and amortization — Depreciation and amortization decreased by $1.6 million, or 20.4%, to $6.2 million as compared to $7.8 million for the year ended December 31, 2021. The decrease was primarily caused by the sale of older trucks purchased during 2016 and 2017 reaching the end of their useful lives and a reduction in new truck acquisitions in 2022.

Insurance premiums and claims — Insurance premiums and claims decreased by $0.7 million, or 16.8%, to $3.3 million for the year ended December 31, 2022 as compared to $4.0 million in 2021.

Truck expenses — Truck expenses increased by $0.7 million, or 33.8%, to $2.8 million for the year ended December 31, 2022 as compared to $2.1 million in 2021. The increase was primarily caused by increased truck maintenance and repairs incurred due to an increase in activity in 2022 as compared to 2021.

General, selling, and other operating expenses — General, selling, and other operating expenses increased by $0.1 million, or 4.9%, to $2.5 million for the year ended December 31, 2022 as compared to $2.4 million in 2021.

Operating taxes and licenses — Operating taxes and licenses decreased by $0.3 million, or 27.9%, to $0.7 million for the year ended December 31, 2022 as compared to $1.0 million in 2021.

Interest expense — Interest expense decreased by $0.3 million, or 24.2%, to $0.9 million for the year ended December 31, 2022 as compared to $1.1 million in 2021. The decrease was primarily caused by a reduction in truck loan balances as a result of loan payments and decreased purchases of new trucks.

EBITDA — EBITDA increased by $4.9 million, or 59.7%, to $13.0 million for the year ended December 31, 2022 as compared to $8.1 million in 2021. The increase was primarily due to an increase in operating revenues, which was offset by an increase in operating expenses.

Liquidity and Capital Resources

As of December 31, 2023 and December 31, 2022, Deluxe had total debt related to truck purchases of $6.6 million and $11.7 million, respectively. Deluxe’ s loans have interest rates ranging from 3.7% to 9.9%, with a weighted average rate of 5.8% as of December 31, 2023.

Deluxe’ s summary statements of cash flows for the periods indicated are set forth in the table below:

For the year ended December 31, 2023, Deluxe generated cash flows from operating activities of $8.5 million, a $1.9 million increase compared to 2022. The increase was primarily due to an improvement in accounts receivables collections. For 2023, net cash flows used in investing activities were down primarily through a lack of truck sales in 2023. For 2023, the net cash flows used in financing activities was lower by $3.5 million compared to 2022, which was due to fewer truck sales and the subsequent reduction in debt associated with the trucks sold.

As of December 31, 2023, Deluxe had working capital of $3.4 million, representing a $0.2 million decrease compared to the working capital total of $3.2 million as of December 31, 2022. This decrease was largely due to increases in trade payables attributable to increases in revenue.

Sierra Mountain Group, Inc.

Results of Operations for the years ended December 31, 2023 and 2022

Operating revenues — Operating revenues increased by $0.8 million, or 1.1%, to $74.6 million for the year ended December 31, 2023 as compared to $73.8 million in 2022.

Truckload revenue increased by $0.9 million, or 1.3%, to $72.5 million for the year ended December 31, 2023 as compared to $71.6 million in 2022. The increase was primarily a result of price increases. For the year ended December 31, 2023, a substantial portion of Sierra’s total revenue was derived from five customers (Toyota, Stellantis, General Motors, Ford and Mercedes Benz), which comprised 78.8% of total revenue. Lease revenue decreased by $0.1 million, or 4.5%, to $2.1 million for the year ended December 31, 2023 as compared to $2.2 million in 2022.

Operating Expenses

Salaries, wages and benefits — Salaries, wages, and benefits decreased by $0.9 million, or 13.4%, to $5.8 million for the year ended December 31, 2023 as compared to $6.7 million in 2022. The decline in compensation was the result of consolidation of job duties and responsibilities offset by wage and salary increases.

Fuel and fuel taxes — Fuel and fuel taxes increased by $0.3 million, or 54.0%, to $0.8 million for the year ended December 31, 2023 as compared to $0.5 million in 2022. The increase was primarily caused by adding more employee drivers to the fleet in the second half of 2023.

Purchased transportation — Purchased transportation increased by $1.2 million, or 2.1%, to $57.7 million for the year ended December 31, 2023 as compared to $56.5 million in 2022. The increase was the result of increased fuel service charges.

Truck expenses — decreased by $66,000, or 9.0%, to $665,000 for the year ended December 31, 2023 as compared to $731,000 in 2022.

Depreciation and amortization — Depreciation and amortization increased by $0.2 million, or 40.8%, to $0.8 million for the year ended December 31, 2023 as compared to $0.7 million in 2022. The increase was primarily the result of adding employee drivers and equipment to the fleet in the second half of 2023.

Insurance premiums and claims — Insurance premiums and claims increased by $0.3 million, or 42.9%, to $1.0 million for the year ended December 31, 2023 as compared to $0.7 million in 2022.

Operating taxes and licenses — Operating taxes and licenses decreased by $10,000, or 33.3%, to $20,000 for the year ended December 31, 2023 as compared to $30,000 in 2022.

General, selling, and other operating expenses — General, selling and other operating expenses decreased by $2.5 million, or 42.4%, to $3.4 million for the year ended December 31, 2023 as compared to $5.9 million in 2022. The decrease was primarily caused by the 2022 settlement of a class action lawsuit for $3.1 million. This was offset by legal and consulting costs associated with the sale of the company of $0.4 million.

Interest expense, net — Interest expense, net for the year ended December 31, 2023 did not change from the 2022 costs of $0.8 million.

EBITDA — EBITDA increased by $2.1 million, or 70.0%, to $5.4 million for the year ended December 31, 2023 as compared to $3.0 million in 2022. The increase was primarily caused by the 2022 legal settlement charge of $3.1 million.

Results of Operations for the years ended December 31, 2022 to 2021

Operating revenues — Operating revenues increased by $4.5 million, or 6.4%, to $73.8 million for the year ended December 31, 2022 as compared to $69.3 million in 2021.

Truckload revenue increased by $5.1 million, or 7.7%, to $71.6 million for the year ended December 31, 2022 as compared to $66.5 million in 2021. The increase was primarily a result of a $2.0 million increase in new revenue and a $3.0 million increase from increased volume, price and fuel service charges. Fuel surcharge revenue increased by $4.4 million, or 366.7%, to $5.6 million for the year ended December 31, 2022 as compared to $1.2 million in 2021.

For the year ended December 31, 2022, a substantial portion of Sierra’s total revenue was derived from four customers (Toyota, Stellantis, Mercedes Benz and General Motors), which comprised 63% of total transportation revenue. Lease revenue decreased by $0.7 million, or 24.1%, to $2.2 million for the year ended December 31, 2022 as compared to $2.9 million in 2021. The decrease was primarily due to a decline in purchases of new trucks in conjunction with the sale of existing trucks during the years ended December 31, 2021 and 2020, respectively, which resulted in a lower quantity of units that could be leased in 2022.

Operating Expenses

Salaries, wages and benefits — Salaries, wages, and benefits decreased by $119,000, or 1.7%, to $6.7 million for the year ended December 31, 2022 as compared to $6.8 million in 2021. The decline in compensation was the result of consolidation of job duties and responsibilities offset by wage and salary increases.

Fuel and fuel taxes — Fuel and fuel taxes increased by $0.1 million, or 33.5%, to $0.5 million for the year ended December 31, 2022 as compared to $0.4 million in 2021. The increase was primarily caused by the increase in fuel prices in 2022 as compared to 2021.

Purchased transportation — Purchased transportation increased by $5.3 million, or 10.4%, to $56.6 million for the year ended December 31, 2022 as compared to $51.1 million in 2021. The increase was the result of increased volume and increased fuel service charges.

Truck expenses — Truck expenses increased by $79,000, or 12.1%, to $731,000 for the year ended December 31, 2022 as compared to $652,000 in 2021.

Depreciation and amortization — Depreciation and amortization decreased by $0.1 million, or 13.7%, to $0.6 million for the year ended December 31, 2022 as compared to $0.7 million in 2021. The decrease was primarily the result of a decrease in purchases of new trucks and existing trucks nearing the end of their useful lives.

Insurance premiums and claims — Insurance premiums and claims decreased by $0.1 million, or 12.5%, to $0.7 million for the year ended December 31, 2022 as compared to $0.8 million in 2021.

Operating taxes and licenses — Operating taxes and licenses decreased by $2,000, or 6.3%, to $30,000 for the year ended December 31, 2022 as compared to $32,000 in 2021.

General, selling, and other operating expenses — General, selling and other operating expenses increased by $2.9 million, or 93.1%, to $5.9 million for the year ended December 31, 2022 as compared to $3.0 million in 2021. The increase was primarily caused by the settlement of a class action lawsuit for $3.1 million in 2022.

Interest expense, net — Interest expense, net decreased by $0.2 million, or 19.9%, to $0.8 million for the year ended December 31, 2022 as compared to $1.0 million in 2021. The decrease was primarily caused by a reduction in our loan balances as a result of decreased purchases of new trucks for lease in the prior years and continuing throughout 2022.

EBITDA — EBITDA decreased by $3.8 million, or 55.3%, to $3.0 million for the year ended December 31, 2022 as compared to $6.8 million in 2021. The decrease was attributed to an overall 12.7% increase in our operating expenses as opposed to only a 6.4% increase in total operating revenue for the year ended December 31, 2022 as compared to 2021. Sierra recognized the cost of a legal settlement in 2022 in the amount of $3.1 million, which is included in operating expenses. This unusual expense had a material adverse effect on operating income and EBITDA reported for that year.

Liquidity and Capital Resources

As of December 31, 2023 and 2022, Sierra had total debt related to truck purchases of $13.4 million and $11.9 million, respectively. Sierra’s loans have an average interest rate of 5.65%.

For the year ended December 31, 2023, Sierra’s cash flows from operating activities increased by $3.5 million, or 56.5%, to $9.7 million compared to $6.2 million in 2022. The increase was primarily due to the improvement of collection of trade receivables from two of Sierra’s major customers in 2023.

Cash flows used by investing activities increased by $6.5 million, or 209.7%, to 3.4 million for the year ended December 31, 2023 as compared to cash flows provided of $3.1 million in 2022. The change in cash flow was primarily due to the capital expenditures related to the increase in company drivers and trucks in the second half of 2023 as well as the proceeds from the bulk sale of vehicles in 2022.

Cash flows used in financing activities decreased by $5.5 million, or 56.1%, to $4.3 million for the year ended December 31, 2023, primarily due to the increase in new equipment financing and a decline in shareholder distributions.

Tribeca Automotive Inc.

Results of Operations for the years ended December 31, 2023 and 2022

Operating Revenue — Total operating revenue for the year ended December 31, 2023 increased by $4.7 million, or 9.3%, to $54.8 million as compared to $50.1 million the year ended December 31, 2022. The increase was primarily a result of a mix of higher volumes from existing customers, new customers and higher prices. In 2023, revenue from fuel surcharge was $4.4 million, accounting for 8.0% of total revenue, which is consistent as a percentage over the prior year.

The revenue mix between company-owned trucks (Truckload) versus sub-haulers (Brokerage) increased from 6.6% of revenue in 2022 to 9.7% in 2023 due mainly to an overall increase in business.

In 2023, 10 customers accounted for 99.3% of Tribeca’s revenue, including Toyota (9.6%), Glovis (23%), Tesla (11.4%), Stellantis (12.6%), Mercedes (10.0%), Mazda (6.5%) and Nissan (8.5%). Tribeca moved approximately 300,100 units in 2023 as compared to approximately 261,000 units in 2022 for a volume gain of 15%.

Salaries, wages and benefits — Driver salaries, wages and benefits increased by $0.1 million, or 2.5%, to $5.5 million for the year ended December 31, 2023 as compared to $5.4 million in 2022 but decreased by 0.6% of revenue for the year ended December 31, 2023 as compared to 2022. This cost was roughly 10.7% of truck revenues for the year ended December 31, 2022 and 10.1% for the year ended December 31, 2023. The decrease was due to a strategic shift to lump drivers into smaller regions and share more routes to eliminate empty miles and improve efficiency.

Fuel and fuel taxes — Fuel and fuel taxes decreased by $1.5 million, or 16%, to $7.9 million for the year ended December 31, 2023 as compared to $9.4 million in 2022. The decrease in fuel and fuel taxes was primarily caused by the price stabilization of diesel fuel costs throughout 2023 as compared to 2022.

Purchased Transportation — Purchased transportation increased by $1.4 million, or 8.7%, to $16.7 million for the year ended December 31, 2023 as compared to $15.3 million in 2022. The increase in purchased transportation was primarily caused by the increase in sub-haulers revenue; however, purchased transportation did not increase at the same rate as revenue because customers were serviced using company-owned trucks rather than sub-haulers.

Truck repair and maintenance expenses — Truck expenses decreased by $0.01 million, or 0.4%, to $2.61 million for the year ended December 31, 2023 as compared to $2.62 million in 2022. Tribeca maintains a rigid maintenance program at Tribeca’s truck repair facility to limit the amount of truck repairs costs.

Depreciation and amortization, net of gain on sale of equipment — Depreciation and amortization, net of gain on sale of equipment increased by $1.4 million, or 66.1%, to $3.2 million in 2023 compared to $1.8 million in 2022. The increase was primarily caused by less gains on the sale of equipment. Eight trucks were disposed/sold in 2023 as compared to 17 trucks in 2022.

Insurance claims and premium — Insurance claims and premiums decreased by $0.6 million to $6.5 million for the year ended December 31, 2023 as compared to $7.1 million in 2022. The decrease was primarily due to the realignment of drivers into tighter geographic regions, which improved truck utilization and allowed Tribeca to haul more automobiles with fewer trucks and remove the trucks that were deemed for sale from the policy. This decrease was slightly offset by the continued minor increase of the insurance cost per truck.

Operating taxes, tolls and licenses — Operating taxes and licenses was $3.3 million for the year ended December 31, 2023, which was slightly higher from $3.0 million in 2022. The increase was relative to the increase in revenue.

General, selling, and other operating expenses — General, selling, and other operating expenses increased by $1.2 million, to $3.8 million for the year ended December 31, 2023 as compared to $2.6 million in 2022. The increase was due to the rent paid for the lease signed in June 2023 for a new location and a relative increase in revenue.

Interest expense, net — Interest expenses, net decreased by $1.2 million, to $0.8 million for the year ended December 31, 2023 as compared to $2.0 million in 2022. The decrease was brought about by the non-deferral and non-refinance of various loans in 2022. Likewise, there were fewer new loans for the purchase of trucks in 2023 while some of the remaining loans were fully amortized in 2023.

EBITDA — EBITDA increased by $2.0 million to $8.9 million for the year ended December 31, 2023 as compared to $6.9 million in 2022. The increase was primarily caused by an increase in operating profit due to higher volumes of sales and lower costs combined.

Results of Operations for the years ended December 31, 2022 and 2021

Operating Revenue — Total operating revenue for the year ended December 31, 2022 increased by $5.5 million, or 12.2%, to $50.1 million as compared to the year ended December 31, 2021. The increase was primarily a result of a mix of higher volumes from existing customers, new customers and higher prices. In 2022, revenue from fuel surcharge was $4.0 million, which accounts for 7.9% of total revenue.

In 2022, the automobile industry continued to stabilize after coming out of (1) the COVID-19 pandemic and (2) supply chain challenges in 2020 and 2021. Price increases from OEMs in the latter half of 2022 drove revenue increases and increased gross margin.

The revenue mix between company-owned trucks (Truckload) versus sub-haulers (Brokerage) increased from 49% of revenue in 2021 to 57% in 2022 due to utilizing more of the company-owned truck fleet.

In 2022, 10 customers accounted for 95.2% of its revenue, including Toyota (19.4%), Glovis (the logistics arm of Hyundai and Kia combined) (16.9%), Stellantis (11.9%), Mercedes (11.6%) and Nissan (8.5%). Tribeca moved roughly 261,000 units in 2022 as compared to 251,500 units in 2021, for a volume gain of 4%.

Salaries, wages and benefits — Driver salaries, wages and benefits decreased by $0.5 million, or 7.9%, to $5.4 million in 2022 compared to $5.9 million in 2021. This cost was roughly 10.8% of truck revenues for the year ended December 31, 2022 and 13.1% for the year ended December 31, 2021. The decrease is because of a strategic shift to lump drivers into smaller regions and share more routes to eliminate empty miles and improve efficiency. Further, there was an extra week of pay in 2021 to drivers to cover COVID time off, in addition to the normal sick days, which made driver pay and benefits look elevated for 2021.

Fuel and fuel taxes — Fuel and fuel taxes increased by $1.9 million, or 24.7%, to $9.4 million in 2022 compared to $7.5 million in 2021. The increase in fuel and fuel taxes was primarily caused by the increase in diesel fuel costs throughout 2022 as compared to 2021.

Purchased Transportation — Purchased transportation increased by $0.1 million, or 1.1%, to $15.3 million in 2022 compared to $15.2 million in 2021. The increase in purchased transportation was primarily caused by the increase in revenue; however, purchased transportation did not increase at the same rate as revenue because customers were serviced using company-owned trucks rather than sub-haulers.

Truck repair and maintenance expenses — Truck expenses increased by $0.3 million, or 13.5%, to $2.6 million in 2022 compared to $2.3 million in 2021. The increase in truck expenses was primarily caused by increased truck repair and maintenance costs as a result of using additional older company trucks in 2022. We maintain a rigid maintenance program at our truck repair facility to limit the amount truck repairs costs.

Depreciation and amortization, net of gain on sale of equipment — Depreciation and amortization, net of gain on sale of equipment decreased by $1.6 million, or 45.5%, to $1.8 million in 2022 compared to $3.4 million in 2021. The decrease was primarily caused by assets nearing the end of their useful life, as well as an increase in gains on the sale of trucks as compared to 2021.

Insurance claims and premium — Insurance claims and premiums decreased by $3.0 million, or 30% to $7.1 million in 2022 compared to $10.1 million in 2021. The decrease was primarily due to the realignment of drivers into tighter geographic regions, which improved truck utilization and allowed us to haul more with fewer trucks and removing the trucks that were deemed for sale from the policy. A slight offset is the continued increase, albeit small, of the insurance cost per truck.

Operating taxes, tolls and licenses — Operating taxes, tolls and licenses was $3.0 million in 2022, which was consistent with the $3.0 million in 2021.

General, selling, and other operating expenses — General, selling, and other operating expenses decreased by $42,168, or 1.6%, to $2.6 million in 2022 compared to $2.7 million in 2021. The decrease was primarily caused by a focus on being more efficient with fewer resources.

Interest expense, net — Interest expenses, net increased by $0.3 million, or 18.3%, to $2.0 million in 2022 compared to $1.7 million in 2021. The increase was primarily caused by higher interest rates on new loans.

EBITDA — EBITDA increased by $5.7 million to $6.9 million in 2022 compared to $1.2 million in 2021. The increase was primarily caused by an increase in operating profit due to higher volumes of sales and lower costs combined with the effect of a write-off of assets in 2021, which led to a large net income loss, and selling older trucks in 2022 for a gain.

Liquidity and Capital Resources

In 2023, as anticipated, Tribeca significantly increased revenue from new contracts and executed on its strategic initiatives by making additions to its fleet and hiring new drivers in anticipation of an increase in business. This executed initiative led to a significant increase in profit as compared to 2022. Current ratio of current assets to current liabilities in 2023 was 1.09 as opposed to 0.78 in 2022, a significant turnaround of 40%.

Total debt related to truck purchases significantly decreased by $6.3 million for the year ended December 31, 2023 to $10.8 million as compared to $17.1 million for the year ended December 31, 2022. Tribeca’s cash flow from operating activities increased by $4.6 million for the year ended December 31, 2023 to $8.9 million as compared to $4.3 million in 2022. The increase was generally due to increased profit. Cash from investing activities produced a positive cash flow of $1.1 million for the year ended December 31, 2023 primarily related to the sale of transportation equipment. Cash flow used in financing activities decreased by $1.2 million for the year ended December 31, 2023 to $8.3 million as compared to $9.5 million in 2022. The decrease was related to fewer payments made on various outstanding loans in 2023.

Emerging Growth Company Status

We qualify as an “emerging growth company,” as defined in the JOBS Act. As an emerging growth company, we may take advantage of specified reduced disclosure and other requirements that are otherwise applicable generally to public companies. These provisions include: (i) being permitted to present only two years of audited financial statements in this prospectus, in addition to any required unaudited interim financial statements, with correspondingly reduced “Management’s Discussion and Analysis of Financial Condition and Results of Operations” disclosure in this prospectus; (ii) reduced disclosure about our executive compensation arrangements; (iii) not being required to hold advisory votes on executive compensation or to obtain stockholder approval of any golden parachute arrangements not previously approved; (iv) an exemption from the auditor attestation requirement in the assessment of our internal control over financial reporting pursuant to the Sarbanes-Oxley Act of 2002; and (v) an exemption from compliance with the requirements of the Public Company Accounting Oversight Board regarding the communication of critical audit matters in the auditor’s report on the financial statements.

We may take advantage of these exemptions for up to five years or such earlier time that we are no longer an emerging growth company. We would cease to be an emerging growth company on the date that is the earliest of (i) the last day of the fiscal year in which we have total annual gross revenues of $1.235 billion or more; (ii) the last day of our fiscal year following the fifth anniversary of the date of the completion of this offering; (iii) the date on which we have issued more than $1.0 billion in nonconvertible debt during the previous three years; or (iv) the date on which we are deemed to be a large accelerated filer under the rules of the SEC. We may choose to take advantage of some but not all of these exemptions. We have taken advantage of reduced reporting requirements in this prospectus. Accordingly, the information contained herein may be different from the information you receive from other public companies in which you hold stock. Additionally, the JOBS Act provides that an emerging growth company can take advantage of an extended transition period for complying with new or revised accounting standards. This allows an emerging growth company to delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. We have elected to avail ourselves of this exemption and, therefore, while we are an emerging growth company, we will not be subject to new or revised accounting standards at the same time that they become applicable to other public companies that are not emerging growth companies. As a result of this election, our financial statements may not be comparable to those of other public companies that comply with new or revised accounting pronouncements as of public company effective dates. We may choose to early adopt any new or revised accounting standards whenever such early adoption is permitted for private companies.

BUSINESS

Overview

We are a leading non-union, specialized freight company focused on providing auto transportation and logistics services. Formed in connection with this offering through the combination of the Founding Companies, five industry-leading operating companies, we will operate one of the largest auto transportation fleets in North America based upon information obtained from leadership of the Auto Haulers Association of America, utilizing roughly 1,130 auto transport vehicles and trailers on a daily basis, including 615 Company-owned transport vehicles and trailers, and employing 649 dedicated employees as of November 30, 2023. Prior to the completion of this offering, we have not operated as a combined company and are dependent upon this offering to complete the Combinations. From our 49 strategically located facilities across the United States, we offer a broad range of auto transportation and logistics services, primarily focused on transporting finished vehicles from automotive production facilities, marine ports of entry, or regional rail yards to auto dealerships around the country. We have developed a differentiated business model due to our scale, breadth of geographic coverage, and embedded customer relationships with leading auto original equipment manufacturing companies (“OEMs”). Our customers range from large, global auto companies, such as General Motors, BMW, Stellantis, and Mercedes Benz, to electric vehicle (“EV”) producers, such as Tesla and Rivian. Additional customers include auto dealers, auto auctions, rental car companies, and auto leasing companies. For the year ended December 31, 2023, we had pro forma combined total operating revenue of $           million, pro forma combined net income of $           million, and pro forma combined EBITDA of $           million. Our pro forma combined financial results cover periods during which we were not under common control or management and, therefore, may not be indicative of our future financial or operating results. See “Management’s Discussion and Analysis of Financial Condition and Results of Operations” for information regarding our use of EBITDA and a reconciliation to a related GAAP measure.

Our combined total operating revenue has grown at a compounded annual growth rate (“CAGR”) of approximately 15% from 2019 to 2023. We believe this historical growth is largely attributable to (i) market share shifting from union to non-union auto transportation and logistics companies, (ii) price increases resulting from industry-leading service levels provided to OEMs, coupled with significant trucking and rail capacity shortages, and (iii) OEMs partnering with auto transportation service providers with nationwide geographic coverage to service their growing network of dealerships. The COVID-19 pandemic created significant production headwinds for the automotive manufacturing sector due to supply chain disruptions and component shortages. As a result of these issues, domestic auto sales, which had averaged 17.2 million units annually in the four years prior to 2020, dropped to 14.5 million units in 2020 following the onset of the pandemic and declined to 13.8 million units in 2022 due to the supply chain issues and semiconductor shortages in that year. Despite the decrease in units, we increased our combined total operating revenue by $148.3 million from 2019 to 2023 as we benefited from market share gains and price increases. Industry production volumes are beginning to rebound and are expected to be a continuing tailwind for the auto transportation and logistics industry throughout the next three to five years. We believe the combination of our executive management team, the management of the Founding Companies, and the fragmented nature of the auto transportation and logistics market will provide us with the capability and opportunity to continue to expand both organically and via effective tuck-in acquisitions.

Source: Management estimates and Bureau of Transportation Statistics.

The above chart presents growth in our combined total operating revenue and combined total units delivered by the Founding Companies despite the significant decline in the seasonally adjusted annual rate (“SAAR”) of auto sales and the number of delivered units. We believe our growth will continue as production volumes increase to a more normalized level and industry tailwinds support growth over the next five years.

Corporate History and Structure

We were founded in June 2023 but have generated no revenue and have conducted no operations to date.

We will be comprised of five operating businesses and their respective affiliated entities, as applicable, operating under the following names: (i) Delta, (ii) Deluxe, (iii) Sierra, (iv) Proficient Transport, and (v) Tribeca.

Despite the fact the Founding Companies have worked in the industry for over thirty years, we have no experience operating as a combined company and will not operate as such until the closing of the Combinations. Thus, we have no combined corporate culture or historical knowledge.

Immediately upon the closing of the Combinations, we will begin to integrate all our operations. While many portions of the businesses of each of the Founding Companies will remain separately managed, we have hired a new chief commercial officer who will be responsible for overseeing business development between the various parts of our business to assure coordination across the platform and to minimize conflicts of interest. Strategic decisions, including acquisitions and fleet expansion, will be made centrally. We also expect to centralize certain administrative functions at our headquarters in Jacksonville, Florida, including insurance, employee benefits, purchasing, accounting, treasury, and risk management.

However, there can be no assurance that we will be able to integrate the operations of the Founding Companies successfully or institute the necessary systems and procedures, including accounting and financial reporting systems, to manage the combined enterprise on a profitable basis. In addition, there can be no assurance that our recently assembled management team will be able to successfully manage the combined entity and effectively implement our operating or growth strategies.

Industry

Management estimates that auto transportation and logistics services industry generated net revenue in excess of $11 billion in the United States annually. New car deliveries comprised roughly $4 billion and used car deliveries comprised roughly $7 billion. The auto transportation and logistics market is highly fragmented. For example, the Auto Hauler Association database consists of over 12,000 unique carriers, primarily comprised of one-truck owner-operators or sub-haulers focused on used vehicle transport. Based upon the information in the Auto Hauler Association database, we are one of the largest non-union auto transportation and logistics companies, in terms size and breadth, of roughly 70 companies competing in the new auto transportation and logistics market and among a few scaled competitors in the industry. Management estimates, based on third-party sources and internal research, that 10 companies have approximately 70% of the new auto transportation and logistics market. In addition to other auto transportation and logistics companies, we also compete with rail transport providers; however, trucking remains the preferred mode of transportation and continues to gain market share from rail transport due to several factors, including faster delivery times, door-to-door delivery capabilities and ever-increasing service standards demanded from customers. Unlike the broader U.S. general freight market, which has experienced a significant slowdown during the past 18 months, the auto transportation and logistics market continues to grow despite macroeconomic conditions due to the specialized nature of the business. We, as well as the overall auto transportation and logistics subsector, stand to benefit from several distinct tailwinds impacting the market, including (i) recovering auto sales and production volumes, (ii) hauling capacity shortages, (iii) a shift toward non-union carriers, (iv) financial pressure on smaller carriers, (v) increasing auto replacement rates, (vi) growth in electric vehicle consumption and (vii) leaner supply chain models. We expect these secular and cyclical factors to drive volume growth, pricing improvements, margin expansion and improving network efficiencies.

Recovering Auto Sales Volumes.    From 2015 to 2019, domestic auto sales averaged approximately 17 million units annually. More recently in 2020, pandemic-related lockdowns and unprecedented supply chain disruptions, including a worldwide semiconductor shortage, contributed to a 24% annual decline in domestic production volumes

and a 15% decline in domestic auto sales compared to 2019. Auto production continued to decline through the first half of 2021 before bottoming in the third quarter of 2021 and beginning to gradually trend toward pre-pandemic norms. Auto sales remained depressed throughout 2021 and 2022.

Source: FRED Economic Data St. Louis FED.

Recent trends in auto sales volumes reflect a material rebound following the aforementioned period of macroeconomic challenges negatively impacting the market. New vehicle sales in the third quarter of 2023 are expected to exceed 15.5 million units, annualized, which is a year-over-year increase of approximately 11% as compared to the third quarter of 2022. The average age of vehicles on the road continues to increase as well, leading us to believe vehicle replacement rates will increase over time, serving as a catalyst for auto transportation and logistics volume growth. Toyota has stated it expects retail auto sales to be roughly 15.5 million units for the full year 2023, up approximately 8.5% year over year, despite interest rates and vehicles prices remaining relatively high. Consequently, falling interest rates are also a looming tailwind for us and we expect sales volumes to normalize to pre-pandemic levels over the next three to five years.

Sources: Automotive News and Bureau of Transportation Statistics.

Auto Transportation and Logistics Capacity Shortage.    The auto transportation and logistics sector, and the overall transportation industry, experienced an abrupt supply shock for both equipment and drivers during the COVID-19 pandemic. As a result, there is insufficient transportation equipment capacity within the current national auto transportation and logistics network to meet expected industry demand. While the driver shortage has gradually trended back toward equilibrium as evidenced by industry research provider Freight Transportation Research’s (“FTR”) truck driver pressure index, equipment shortages persist, and access to committed transportation capacity remains a major and growing concern amongst OEMs. As a result, industry participants with capacity and scale are experiencing significant pricing leverage that is expected to last as auto production volumes rise.

Shift from Union Carriers to Non-Union Carriers.    The growing appeal of reliable, affordable and flexible trucking capacity to auto OEMs has fueled a market-wide shift from unionized to non-union haulers, like Proficient. The Company believes that unionized carriers historically dominated a significant majority of the industry and that today, unionized carriers hold substantially less of the new car market. Union drivers are typically subject to workplace restrictions that not only limit their service capabilities to customers, but also limit their potential earnings as drivers. Union drivers may face tougher restrictions on not only total hours worked, but also which hours they can work specifically, leading many to haul during peak traffic hours, which is less profitable for drivers working on a per mile basis, as well as the carrier. Non-union drivers, who operate under a much simpler and less restricted pay-per-load and/or miles-driven driver pay model, have the incentive and flexibility to provide additional services to customers and move as many loads as possible. We expect to see market share continue to shift toward scaled, non-union trucking companies and away from unionized carriers.

Financial Pressure on Smaller Operators.    U.S. auto transportation and logistics companies are facing numerous challenges including rising equipment costs, onerous OEM capacity commitment requirements, rising insurance premiums and driver retention difficulties. As the scarcity of equipment has risen, OEMs are demanding a large increase in committed capacity (more equipment) and service flexibility from carriers in order to win new contracts. Larger auto transportation and logistics companies have significantly more financial capacity to fund equipment purchases and greater purchasing power with suppliers, enabling them to acquire equipment much easier and quicker than smaller competitors. OEMs realize the benefits of using fewer larger carriers and continue to shift their demand to scaled providers.

Consumer Replacement Cycle.    The average age of used cars in the United States stands at a record 12.2 years according to the Bureau of Transportation Statistics. Tight supply in recent years alongside rising prices have forced consumers to hold on to their vehicles longer, shifting demand for new and used vehicles into future years. The age of cars cannot increase forever, so at some point we expect this trend to end and new car sales to increase.

Growth in Electric Vehicles.    A shift in consumer trends toward electric vehicles (“EVs”) could lead to increased demand for auto haulers. Auto haulers must adhere to strict cargo weight restrictions limiting the number of automobiles a tractor-trailer can carry. Typically, these weight restrictions allow for a standard trailer to carry nine-to-ten internal combustion engine (“ICE”) type vehicles per load. Electric vehicles are as much as 30% heavier than comparable ICE vehicles, effectively reducing practical capacity from nine or more vehicles to six vehicles per load and subsequently increasing the load count for a fixed number of vehicles when hauling EVs. This represents a significant reduction in overall network capacity at a time where equipment shortages are still present, creating a sizeable opportunity for scaled providers to handle additional loads.

From 2016 to 2022, annual sales volumes for electric vehicles have grown from approximately 159 thousand units to approximately 918 thousand units, representing a CAGR of approximately 49% and demonstrating the rapid growth and adoption of the EV market. Cox Automotive research estimates approximately 870,000 EVs have been sold year to date through the third quarter of 2023 and forecast a year-end sales volume of over 1 million units. Several key drivers are influencing U.S. consumption trends toward EVs, including (i) fuel price volatility, (ii) President Biden’s executive order, declared in 2021, that outlined the goal to have at least 50% of new car sales in 2030 be “zero-emission vehicles”, (iii) the Inflation Reduction Act, passed in 2022, which provides up to $7,500 in tax credits for eligible purchases of electric vehicles, and (iv) the Infrastructure and Jobs Act which provides funding for new charging stations across the country, making them more accessible to the public. The EV market continues to realize extraordinary growth today despite macroeconomic challenges as evidenced by a year-over-year increase of approximately 48% in the first half of 2023 as compared to the first half of 2022, with approximately 550,000 units sold.

Leaner Supply Chain Models.    In recent years, OEMs and auto dealer behaviors have changed — positively impacting us. Auto dealers realized the benefits of carrying smaller inventories during the pandemic and recovery periods, and as a result, dealers want to carry less inventory with customers willing to order a vehicle for future delivery. Consequently, a premium tier of delivery service to the auto dealer network has been created with OEMs and dealers willing to pay higher rates for flexible delivery services. Despite inventory levels beginning to recover, OEMs’ desire to have less finished inventory at dealerships, coupled with high interest rates that elevate floor plan financing costs, continue to inhibit this floor plan inventory rebound. Hence, leaner supply chain models are a burgeoning tailwind for scaled auto transportation and logistics companies.

Competitive Strengths

We believe the following key strengths have been instrumental in our success and position us well to continue growing our business and market share:

Ability to Capitalize on Favorable Industry Tailwinds.    We, as well as the overall auto transportation and logistics subsector, stand to benefit from several distinct tailwinds impacting the market, including (i) recovering auto sales and production volumes, (ii) transportation equipment capacity shortages, (iii) a shift toward non-union auto transportation and logistics companies, (iv) financial pressures on smaller auto transportation and logistics companies, (v) increasing auto replacement rates, (vi) growth in EV consumption and (vii) leaner supply chain models. We expect these secular and cyclical factors to drive volume growth, pricing improvements, margin expansion and improving network efficiencies. We believe our competitive position will allow us to capitalize on these trends to an even greater extent than the general auto transportation and logistics subsector. For example, as a result of these favorable industry trends, our combined average revenue per unit delivered increased from $105 in 2016 to $139 in 2020 and $196 in 2023, representing a CAGR of approximately 9.3% from 2016 to 2023. The following chart demonstrates the lack of correlation and the stable pricing power, based on revenue per unit, of the auto transportation and logistics industry as compared to the broader, more cyclical overall freight market:

Source: Management calculations and FTR.
Note: Revenue per unit excludes fuel surcharge. Revenue per unit is indexed to CY2012; CY2012 is equal to 100.

Scaled Provider of Auto Transportation with a Large, Modern Fleet.    Through the combination of the five Founding Companies, we will become one of North America’s largest providers of auto transportation and logistics services based upon data obtained from the U.S. Department of Transportation Safety and Fitness Electronic Records System and Transport Topics, with an established, nationwide geographic footprint. We operate one of North America’s largest auto transportation and logistics networks with access to roughly 1,130 trucks, including 615 Company-owned tractors and trailers as of November 30, 2023 with an average age of approximately 5.8 years and 5.6 years, respectively. Given our large scale and extensive infrastructure, we offer both network density and broad geographic coverage to better meet our customers’ transportation needs. Greater network density also leads to greater utilization of our transportation equipment, which results in greater profitability. We believe our scale and financial strength will provide us with access to capital necessary to consistently invest in our capacity, technology, and people to drive performance and growth, and to comply with industry regulations. Our scale will also give us significant purchasing benefits in outsourced third-party capacity and fuel, equipment and maintenance, repair and operational costs, lowering our costs compared to smaller competitors. Lastly, our network of 49 leased terminal locations provides an important local presence in select geographic regions.

Blue Chip Customer Base Comprised of Leading Automotive Original Equipment Manufacturers.    We service 17 of the top 18 global OEMs by sales volume in 2022 that sell in the United States, and management estimates that our average customer tenure with our top 10 customers is over seven years. We possess multi-year contracts with each of our OEM customers. These contracts are generally neither exclusive nor do they have specified minimum levels of usage or revenue. Through the combination of the five Founding Companies, we believe there will be significant opportunities to cross-sell our services across our nationwide geographic footprint as OEMs continue to look for guaranteed, nationwide capacity.

Highly Experienced Management Team with Significant Industry Expertise.    Our management team consists of industry veterans with significant experience operating in the transportation and logistics industry. Our Chief Executive Officer, Richard O’Dell, has over 23 years of experience operating in the transportation and logistics industry, having served as the former Chief Executive Officer of Saia, a transportation company providing less-than-truckload and other value-added services, including non-asset truckload, expedited and logistics services across North America, for 14 years. Randy Beggs, our President and Chief Operating Officer, has over 35 years operating in the auto transportation and logistics industry, having served as CEO of Proficient Auto Transport since 2018. Mr. O’Dell and Mr. Beggs will be supported by a highly talented group of tenured auto transportation and logistics veterans, who have an average of over 25 years of experience operating within the auto transportation and logistics subsector and broader trucking industry. We believe our leadership team is well positioned to execute our strategy and remains a key driver of our financial and operational success. Our leadership team will also benefit from the experience of the members of our Board, including James B. Gattoni, President and Chief Executive Officer of Landstar System, Inc., a worldwide, technology-enabled, asset-light provider of integrated transportation management solutions, and Douglas Col, the current Executive Vice President and Chief Financial Officer of Saia.

Leading Auto Transportation and Logistics Provider with Non-Unionized Employee Base.    Our employee base is comprised of one of the largest pools of non-unionized drivers in the auto transportation and logistics industry based upon information obtained from the Auto Haulers Association of America. We believe our non-unionized operating model allows us to provide a higher level of service to our customers, while securing a cost advantage relative to our unionized competitors and enabling us to attract and retain highly qualified, motivated individuals.

Barriers to Entry Driving Competitive Moat.    The auto transportation and logistics industry is characterized by high equipment prices and specialized service requirements from OEMs. Furthermore, the ability to leverage a large network and broad customer base favors larger auto transportation and logistics companies that can maximize backhaul opportunities. Small auto transportation and logistics companies, such as one-truck operators with the ability to compete for wallet share within the general freight market, are losing share within the auto transportation and logistics sector as key customers are shifting volume toward auto transportation and logistics companies with the equipment capacity, scale, reputation and density to service their more specific demands.

Our Strategy

Our strategy is to be one of the nation’s leading providers of auto transportation and logistics services by focusing on broadening our platform and expanding our service offerings while maintaining the high-quality of our existing services and increasing our operational efficiency. We intend to achieve this objective by executing the following business strategies:

Operating Strategy

Drive Organic Growth by Offering Committed Capacity and Consistently High-Quality Service to Expand Existing Relationships.    We believe that the ability to commit transportation equipment capacity and timely, professional and dependable service are the most important factors in maintaining and expanding customer relationships in the auto transportation and logistics industry. We intend to use our scale to offer customers committed transportation equipment capacity and our financial strength to consistently invest in our capacity. We intend to implement proven practices of the Founding Companies throughout our operations in areas such as dispatching technology, driver training and professionalism, preventive maintenance and safety. We intend to cross-sell the consistently high-quality service across our expanded platform to existing customers of our various Founding Companies.

Expand Service Offerings to Further Entrench Existing Customer Relationships and Win New Customers.    We have strategically identified select customers looking for additional related services that would expand our relationships with these customers. For example, there is an opportunity to further expand our operations of regional auto storage yards on behalf of major automotive OEMs, which we believe will lead to future revenue opportunities. We believe that our expanded scale and other resources will permit us to acquire new customers that require greater auto transportation and logistics capacity and storage capabilities than those possessed by smaller operators. We also intend to utilize our geographic diversity to pursue additional business from existing customers that operate on a regional or national basis, such as auto OEMs, leasing companies, insurance companies and automobile auction companies.

Achieve Operating Efficiencies.    We intend to have the Founding Companies operate under their existing names and management teams but will seek to achieve operating efficiencies through improved asset utilization. Increased route density and backhaul opportunities lead to improved profitability, which we intend to achieve through the combination of the Founding Companies. We intend to operate all operations under one integrated transportation management software and route planning software, allowing us to have enhanced visibility and improve equipment utilization. The integration will begin immediately upon the closing of the Combinations, beginning with the accounting software. As three of the five Founding Companies already utilize the same accounting software, the costs for integration will be de minimis. Integration will also initially focus on consolidating route planning and dispatch software. Management expects this will not have significant associated expenses as we expect to utilize software already used by some of the Founding Companies. We also expect to realize cost savings by centralizing certain administrative functions at our headquarters in Jacksonville, Florida, including insurance, employee benefits, purchasing, accounting, treasury, and risk management. We believe the centralization of administrative functions can be achieved within 12 months of the closing of this offering and will not have significant associated expenses. Rather, such consolidation may incur financial benefits as administrative redundancies will be removed. We also believe there will be opportunities to use our purchasing power to seek improved pricing in areas such as purchased transportation, fuel, vehicles, and parts, and plan on creating a position tasked with overseeing collective purchasing. The expected costs of that integration are minimal, estimated to only be that of the new salary for one employee.

Maintain Local Expertise.    We anticipate that members of management of the Founding Companies, and companies to be acquired in the future, will continue to maintain local control of their daily operations and work in coordination with each other, rather than compete, for business opportunities in their local markets. We believe this approach will enable us to take advantage of the local and regional market knowledge, name recognition and customer relationships possessed by each acquired company while still allowing us to bring greater operating efficiency to the larger platform. We believe this structure will be attractive to owners who desire to benefit from being part of a larger platform while still continuing to operate the companies they built. We plan to hire a general manager who will be responsible for overseeing and approving the pricing and bids of each of the Founding Companies, such that the Founding Companies will not be competing against each other despite maintaining existing daily operations.

Optimize Asset Flexibility.    We intend to own and operate a significant percentage of the tractors and trailers we utilize in our daily operations, as opposed to primarily outsourcing to owner-operators or sub-haulers. For the year ended December 31, 2023, 34% of our combined revenue came from company-operated vehicles. We believe this approach allows us to maximize our profitability because it permits us to manage down underlying operating costs versus paying a higher fixed percentage of revenue to third-party haulers. This approach also provides more certainty to our customers

because of the Company’s ability to provide guaranteed capacity in an increasingly complex market. By combining the five Founding Companies, we believe there will be more favorable purchasing opportunities with our vendors to allow us to add more Company trucks and Company drivers. At the same time, we expect to utilize a diversified approach to securing additional capacity to service our customers where we do not currently possess significant network density.

Acquisition Strategy

Expand Within Existing Geographic Markets and Select New Markets.    The auto transportation and logistics industry is highly fragmented, with the majority of the industry represented by smaller, regional providers representing attractive tuck-in acquisition opportunities for us. We see opportunity with regional providers that overlap with existing geographic footprints of the Founding Companies that would improve our network density in select geographies and add new customers. We believe there will be significant opportunities to acquire and integrate these smaller acquisition candidates into our existing infrastructure, providing opportunities for cost synergies and cross-selling. In addition, we may seek to vertically integrate our operations by acquiring companies that offer complementary services that we do not currently offer. There are several new geographic regions where we can expand our footprint via acquisition of smaller regional providers. When pursuing an acquisition, we intend to acquire established, high-quality companies in markets where we can establish a leading market position to serve as core businesses into which additional operations may be consolidated.

Overview of Founding Companies

Proficient was formed to become a leading national provider of motor vehicle auto transportation and logistics services. We believe that significant opportunity exists for successful consolidation of auto transportation and logistics service providers given the fragmented nature of these markets and the potential to achieve operating efficiencies, to share effective service capabilities of acquired operations and to pursue synergies that arise from integrating distinct capabilities of various businesses within a single entity. See “— Strategy.”

Our founders, Ross Berner and Mark McKinney, have worked for large institutional investment management firms for over 20 years investing in public securities across multiple industries, with a particular investing focus on business services, including transportation and logistics companies. Messrs. Berner and McKinney were the co-chief acquisition officers of United Road Services, Inc. (“United Road Services”), which was formed in 1998 to become a leading national provider of motor vehicle and equipment towing and transport services. United Road Services completed its initial public offering and the acquisition of all of the outstanding common stock and ownership interests of eight motor vehicle and equipment towing and transport service companies.

Messrs. Berner and McKinney evaluated many companies in addition to the Founding Companies when deciding to proceed with the Combinations. Based on their research and contacts, Messrs. Berner and McKinney first identified companies whose founders wanted to be involved in creating a public platform designed to ensure the alignment of business objectives and to increase the likelihood of continuity. They then examined each company’s size, geographic location and customer mix. Finally, they looked at a number of financial metrics, including those discussed below. Messrs. Berner and McKinney decided not to pursue those other companies primarily because they did not fit intended valuation metrics or profitability metrics, lacked committed ownership, or their customer base or geographic location was too concentrated, thus not providing meaningful growth opportunities.

Proficient Auto Logistics has entered into definitive agreements to acquire five auto transportation and logistics service companies. We will consummate the acquisitions of the Founding Companies simultaneously with consummation of the offering. Therefore, if we fail to close the Combinations, this offering will not close. The consideration to be paid by us in connection with the acquisitions of the Founding Companies consists of approximately $180.4 million in cash,           shares of common stock, assuming an initial public offering price of $          per share, and the assumption approximately $          million in outstanding indebtedness.

The Combinations were the product of separate arms-length negotiations between Proficient Auto Logistics and each of the representatives of the Founding Companies. Each Founding Company executed a letter of intent (individually, a “LOI,” and collectively, the “LOIs”) with Proficient Auto Logistics, setting forth the proposed terms of the Combinations with each respective Founding Company. After the execution of the LOIs, Proficient Auto Logistics conducted due diligence based on the documents and other information provided by the Founding Companies. Due diligence efforts focused on, among other areas, each of the Founding Company’s capitalization, indebtedness (including capital leases), intellectual property, owned and leased real estate, as applicable, material contracts and employment and benefits arrangements.

In parallel with legal diligence efforts, the parties and their respective legal counsel discussed and negotiated the terms of the various Combination Agreements and ancillary agreements. Numerous calls and virtual meetings occurred during this period to discuss various legal and business terms. Negotiations between Proficient Auto Logistics and each of the Founding Companies focused on limiting the ability of the Founding Companies to distribute cash during the period between signing and closing of the Combinations, specific indemnities from the Founding Companies’ owners and shareholders for known issues identified in the course of due diligence, and the recourse available to Proficient Auto Logistics generally in the event of any breaches or inaccuracies in the representations and warranties made by the respective Founding Companies. In connection with the foregoing, the parties exchanged multiple drafts of the Combination Agreements and ancillary agreements as part of the negotiations. The negotiations took into consideration, with respect to each Founding Company individually, its reputation in the industry, profit trends, growth patterns, relationships with key customers and geographic presence, any issues identified in the course of the legal due diligence efforts and with respect to the Founding Companies collectively, their ability to consolidate routing, expand the network and diversify their collective customer base.

In determining and negotiating the consideration to be paid in the Combinations to each of the individual Founding Companies, we relied on the experience and judgment of Messrs. Berner and McKinney, who leveraged their 20 years of experience in investing in public securities across multiple industries, including transportation and logistics companies. Their evaluation considered a variety of metrics including, a review of enterprise value/ EBITDA, enterprise value/EBITDA-capex, free cash flow multiples and sustainability of revenues and operating margins. The individual valuations did not factor in any presumed synergies that may be achieved following completion of the Combinations. We did not obtain independent valuations, appraisals or fairness opinions to support the consideration that we agreed to pay.

See “Certain Relationships and Related Person Transactions.” For the year ended December 31, 2023, we had pro forma combined total operating revenue of $          million and pro forma net income of $          million. Our pro forma combined financial results cover periods during which we were not under common control or management and, therefore, may not be indicative of our future financial or operating results.

PROFICIENT TRANSPORT was founded in 1993. Proficient Transport primarily operates in the South, Southeast and East Coast regions of the United States; however, Proficient Transport has delivered to all 48 states of the contiguous United States and Western Canada over the past three years. Proficient Transport has nine facilities in five U.S. states. It operates 112 company-owned vehicles and has access to a network of sub-haulers and owner-operators. It had approximately 140 employees and 39 independent contractors as of December 31, 2023. In 2023, Proficient Transport had total operating revenue of $135.8 million and net income of $7.2 million, with a substantial portion of operating revenue derived from its four largest customers, General Motors, Glovis (the logistics arm of Hyundai and Kia), Ford and Mercedes Benz. Upon consummation of the offering, we expect to sign a three-year employment agreement with Randy Beggs, the current CEO of Proficient Transport, pursuant to which Mr. Beggs will become our President and COO and will continue to manage Proficient Transport’s operations. In addition, Mr. Beggs will become a director of the Company upon consummation of the offering. Proficient selected Proficient Transport as a Founding Company because of the strength of its management, its track record of growth, customer relationships, reputation and large geographic presence.

DELUXE was founded in 2004. Deluxe primarily operates in the West Coast and Southwest regions of the United States, with near-term cross-border opportunities planned to significantly grow their logistics offerings in the Texas market. Deluxe has 16 facilities spanning across five states in the western United States. Today, Deluxe delivers over 600,000 cars annually for 15 OEMs, and it operates 137 Company-owned vehicles and has access to a network of sub-haulers. It has roughly 185 employees and no independent contractors, and had total operating revenues of $76.5 million and net income of $5.9 million in 2022. In 2022, a substantial portion of Deluxe’s net revenue was derived from three customers, General Motors, BMW and Stellantis. Upon consummation of the offering, we expect Jesus Holguin and Raul Silva, the current co-founders of Deluxe, will continue to manage Deluxe’s operations. Proficient selected Deluxe as a Founding Company because of the strength of its management, its history of growth, contracts with customers and geographic presence in the West Coast of the United States.

DELTA was founded in 1999. Delta primarily operates in the East Coast and Southeast regions of the United States. Delta has four facilities in multiple states in the United States. It operates 103 of its own vehicles and has access to a network of sub-haulers. It has 115 employees, including 84 company drivers and no independent contractors estimated as of December 22, 2023, and had net revenue of $44.6 million and net income of $3.7 million in 2022. In 2022, a substantial portion of Delta’s net revenue was derived from four customers, BMW, Volkswagen, Mercedes Benz and Jaguar/Land Rover. Upon consummation of the offering, John Skiadas, the current CEO of Delta, will continue to manage Delta’s operations as set forth in an employment agreement. In addition, Mr. Skiadas will become a director of the Company upon consummation of the offering. Proficient selected Delta as a Founding Company because of the strength of its management, its exposure to key customers, and its lower damage ratios.

SIERRA was founded in 1988. Sierra primarily operates in the West Coast and the Midwest regions of the United States. Sierra has 18 facilities across ten states in the United States. It owns 133 vehicles, of which 17 are operated using company drivers with the balance leased to either owner-operators or sub-haulers, and has access to a network of sub-haulers and owner-operators as of December 22, 2023. It has 61 employees and 121 owner-operator independent contractors, estimated as of December 31, 2023, and had net revenue of $73.8 million and net income of $1.4 million in 2022. In 2022, a substantial portion of Sierra’s net revenue was derived from four customers including Toyota, Stellantis, Mercedes Benz and General Motors, with which Sierra has an average tenure of over twenty years. Proficient selected Sierra as a Founding Company because of the strength of its management, its deep customer ties, market presence in California and history as an asset light operator.

TRIBECA was founded in 2010. Tribeca primarily operates in the East Coast and the Southeast regions of the United States. Tribeca has four facilities across multiple states in the United States. It operates 114 trucks, ten of which are leased to owner-operators. In 2022, it had 108 employees and 16 independent contractors over the course of the year, and had net revenue of $50.1 million and net income of $0.7 million in 2022. In 2022, a substantial portion of Tribeca’s net revenue was derived from four customers, Toyota, Glovis (the logistics arm of Hyundai and Kia), Stellantis and Mercedes Benz. Upon consummation of the offering, Leo Munoz, the current CEO of Tribeca, will continue to manage Tribeca’s operations as set forth in an employment agreement. Proficient selected Tribeca as a Founding Company because of the strength of its management, its geographic presence in the Northeast United States, which allows expansion, and its list of customers and proximity to Delta, which enables the consolidation of routing to increase utilization.

Operations and Services Provided

We provide new and used auto transportation and logistics services to automobile manufacturing companies, leasing companies, automobile dealers, automobile auction companies, long-distance transporters, brokers and individuals. Services typically are provided as needed by particular customers and charged according to pre-set rates based on auto size, weight and mileage. We transport large numbers of vehicles from auto manufacturing sites, marine ports and rail hubs to individual auto dealers. On the used car transport side, cars are picked up and delivered primarily to rental car locations and automobile auctions. In addition, we provide transport services for dealers that transfer new cars from one region to another based on demand.

Sales and Marketing; Customers

We believe that the commitment to consistent, high-quality service demonstrated by the Founding Companies has produced long-term relationships with many existing customers and positions us to expand market penetration through the use of enhanced sales and marketing efforts. The chart below indicates the tenure (i.e., the maximum number of years the customer has been served by one of the Founding Companies) of our top 12 customers:

To date, the Founding Companies have largely focused on building and maintaining personal relationships with customers, while also using limited print advertising in newspapers and industry periodicals. Upon consummation of the Acquisitions, we will continue to focus our marketing efforts on large commercial accounts, including auto manufacturers, rental car companies, auto auctions, and auto dealerships. We intend to augment the capabilities and contacts of the owners and general managers of the Founding Companies with a sales program designed to identify significant target customers and expand working relationships with existing customers.

Although we generally have a diverse customer base, five customers, General Motors, Stellantis, Mercedes Benz, BMW and Toyota account for roughly         % of the Founding Companies’ combined total operating revenue in 2023. Our business with these five companies, like all other new car delivery contracts, generally run from three to five years within a certain geographic region, though more recently, some OEM customers are agreeing to longer five to ten year contracts. We currently operate under 112 individual contracts with our customers, with no single contract representing more than 4% of our 2023 combined revenue. Historically, all contracts have required public re-bidding upon termination of the contract; however, if the service levels are good, there is a high likelihood that the incumbent carrier will retain

the business. Today, many contracts include automatic extensions and OEMs are generally more open to private rate negotiations with incumbent carriers as opposed to a public bidding process. As an industry leader, we should benefit from these changes in contract structure and process. We expect that our existing customers will continue to account for a significant percentage of our revenue for the foreseeable future. The loss of a significant customer, including any of the top five, could have a material adverse effect on our business, financial condition and results of operations.

Dispatch and Information Systems

Each of the Founding Companies operates a dispatch system, with some of the Founding Companies utilizing the same system, to assign individual transport vehicles to particular cars that require delivery. Each of the Founding Companies also have computerized positioning systems which identify and track vehicle location and status, thereby decreasing response times and increasing asset utilization. Our initial integration efforts will focus on consolidating route planning and dispatch software of the Founding Companies, as some of the software is already used by some of the Founding Companies. Due to our recent formation, each of the Founding Companies is currently using the accounting and financial reporting systems that it has in place. Upon closing of this offering, we will begin integrating and implementing accounting systems across the Founding Companies that will enable us to centralize our accounting and financial reporting activities at our headquarters in Jacksonville, Florida. We anticipate that we will need to upgrade and expand our information technology systems on an ongoing basis as we expand our operations and completes acquisitions.

Competition

The provision of auto transportation and logistics services is competitive. Competition for the delivery of auto transportation and logistics services is based primarily on quality, service, timeliness, price, and geographic proximity. We compete with certain large auto transportation and logistics companies on a regional and local basis, some of which may have greater financial and marketing resources than us. We also compete with many smaller local companies, which may have lower overhead cost structures than us and may, therefore, be able to provide their services at lower rates than us. We believe that we will be able to compete effectively because of our high-quality service, geographic scope, broad range of services offered, experienced management and operational economies of scale. We intend to differentiate ourselves from our competition in terms of service and quality by investing in training, systems and equipment and by offering a broad range of products and services, and in terms of timeliness and geographic proximity by establishing facilities and vehicles in targeted geographic markets so that we will be positioned to provide timely deliveries in response to orders from the auto companies. We may also face competition for acquisition candidates from companies which are attempting, or may attempt in the future, to consolidate towing and transport service providers. Some of our current or future competitors may be better positioned than us to finance acquisitions, to pay higher prices for acquisition candidates pursued by us, or to finance their internal operations.

The Founding Companies operate 49 leased facilities that are used to garage, repair and maintain transport vehicles. All of our facilities are leased from other parties and, in three cases, those parties are former owners or affiliates of the Founding Companies. See “Certain Relationships and Related Person Transactions.” Many of our facilities are capable of being utilized at higher capacities, if necessary. We will seek to consolidate facilities and vehicle storage capacity in the future.

The Founding Companies operate a fleet of roughly 1,130 auto transport vehicles and trailers as of December 31, 2023. Our fleet consists both of Company-owned tractors and trailers and those run by owner-operators and sub-haulers. We intend to own and operate a significant percentage of the tractors and trailers we utilize in our daily operations, as opposed to primarily outsourcing to owner-operators or sub-haulers. When needed, each of the Founding Companies has access to a vast network of sub-haulers to fulfill client needs. We use a variable number of sub-haulers daily to maximize efficiency, such that vehicles physically utilized in the fleet may vary and require a wide range of management estimates for determining total sub-haulers. We believe these vehicles are generally well-maintained and adequate for our current operations.

Risk Management, Insurance and Litigation

The primary liability risks in our operations include bodily injury, property damage, workers’ compensation claims and, potentially, environmental and land use claims. Although each of the Founding Companies has maintained its own insurance, we expect to obtain insurance on a Company-wide basis, subject to customary deductibles. The Founding Companies have been, from time to time, parties to litigation arising in the ordinary course of their respective businesses, most of which involves claims for personal injury or property damage incurred in connection with their operations. The Company is not currently involved in any litigation that the Company believes will have a material adverse effect on our business, financial condition or results of operations, except as set forth below.

On August 1, 2016, a class action lawsuit was filed in the Superior Court of New Jersey (the “Court”) against Tribeca, Tribeca’s president and co-owner, Leonel Munoz, the Tribeca’s vice-president and co-owner, Ramon Munoz, ABC Corp., and Jane and John Does. The plaintiffs purported to represent a class of individuals that performed truck driving and/or delivery functions for Tribeca from 2014 to the present for the New Jersey Wage Payment Law claim and from July 2014 to present for the New Jersey Wage and Hour Law claim. The Court certified the class of similarly situated plaintiffs on October 11, 2017. Tribeca disputed the claims described above and Tribeca intends to defend the lawsuit vigorously. Given the procedural posture and the nature of the case and given that the alleged damages have not been specified, Tribeca is unable to make a reasonable estimate of the potential loss or range of losses, if any, that might arise from those matters. Following the Combinations, the Company intends to continue to vigorously defend the lawsuit.

Employees

As of December 31, 2023, the Founding Companies had approximately     employees and     independent contractors and an extensive network of sub-haulers. None of the employees of the Founding Companies are subject to collective bargaining agreements.

We recognize that our continued ability to attract, retain and motivate exceptional employees is vital to ensuring our long-term competitive advantage. Our employees are critical to our long-term success and are essential to helping us meet our goals. Among other things, we support and incentivize our employees in the following ways:

•        Talent Development, Compensation and Retention.    We strive to provide our employees with a rewarding work environment, including the opportunity for growth, success and professional development. We provide our employees with competitive salaries and bonuses, opportunities for equity ownership, development programs that enable continued learning and growth and a robust employment package — all designed to attract and retain a skilled and diverse workforce.

•        Health and Safety.    The safety and well-being of our employees is our top priority. We support the health and safety of our employees by providing health care, retirement planning, paid time off and other additional benefits, which are intended to assist employees to manage their well-being.

•        Inclusion and Diversity.    We believe that the unique contributions of individuals with varying backgrounds and experiences will benefit our businesses and that much of our success is rooted in the diversity of our teams. We value diversity at all levels and focus on extending our diversity and inclusion initiatives across our entire workforce.

MANAGEMENT

Executive Officers and Directors

The following table sets forth information concerning those persons who will serve as the Company’s directors and officers upon consummation of the offering and those currently serving as the Company’s directors and officers (the information is as of December 21, 2023):

The following is a brief biography of each of our current executive officers and directors:

Executive Officers and Directors

Ross Berner has served as our President and a director since June 2023. Mr. Berner will step down as our President and as a director upon completion of this offering. Mr. Berner previously served as Chief Operating Officer of Live Oak Acquisition Corp., a blank-check special purpose acquisition company that consummated a business combination with Meredian Holdings Group, Inc., which was renamed Danimer Scientific, Inc. in December 2020. Mr. Berner was a founding partner at PCO Investment Management L.P., an investment management company, from 2013 to 2016. He served as partner and portfolio manager at Weintraub Capital Management, L.P. from 1999 to 2012, where he oversaw investments in special situations and event-driven opportunities across all industries. Mr. Berner was also a co-founder of United Road Services (formerly NASDAQ: URSI), which had its initial public offering in 1997 and became one of the largest non-union car-hauling companies in the United States and which was acquired by Charterhouse Financial in 2000. Mr. Berner co-founded Fenix Parts, Inc. (formerly NASDAQ: FENX), a consolidator of recycled auto parts, in 2014, which completed its initial public offering in 2015 and was taken private in 2018. Mr. Berner has an MBA from Columbia University with a concentration in Finance and a bachelor’s degree in Economics from Northwestern University. Upon completion of the offering, Mr. Berner will resign as President and a director of the Company, but will remain an employee of the Company in a business development capacity.

Mark McKinney has served as our Secretary and a director since June 2023. Mr. McKinney will step down as our Secretary and as a director upon completion of this offering. Mr. McKinney was a portfolio manager at Kopernik Global Investors, LLC, an asset management firm, from July 2013 to June 2023. Mr. McKinney previously served as a portfolio manager at Vinik Asset Management LP, an asset management firm, from May 2012 to June 2013. Mr. McKinney was also a co-founder of United Road Services (formerly NASDAQ: URSI), which had its initial public offering in 1997 and became one of the largest non-union car-hauling companies in the United States before it was acquired by Charterhouse Financial in 2000. Mr. McKinney earned his Bachelor of Science from the University of California at Los Angeles in Economics. He received his MBA from the University of Southern California Marshall School of Business. Upon completion of the offering, Mr. McKinney will resign as Secretary and a director of the Company, but will remain an employee of the Company in a business development capacity.

Richard D. O’Dell will become our Chief Executive Officer and chairman upon completion of this offering. Mr. O’Dell has served as the Non-Executive Chairman of the Board of Directors of Saia since April 2020. Mr. O’Dell served as Chief Executive Officer of Saia from December 2006 until his retirement in April 2020. Mr. O’Dell joined Saia in 1997 and served in various executive and financial positions until his appointment as Chief Executive Officer.

Mr. O’Dell also has experience in public accounting as a certified public accountant. Mr. O’Dell graduated with a bachelor’s degree in Accounting from the University of Kansas. Mr. O’Dell’s industry and accounting expertise and deep understanding of finance in large companies qualify him to serve on our Board.

Randy Beggs will become our President and Chief Operating Officer and a director upon completion of this offering. Mr. Beggs has been the President and Chief Executive Officer of Proficient Transport since April 2018. Mr. Beggs was Executive Vice President at Diversified Automotive, Inc., an auto shipping and processing supplier in the U.S. Northeast, from March 2013 to February 2017, and in various capacities, finally Senior Vice President of Operations and Business Development of Jack Cooper Transport, an auto transport and specialized vehicle logistics provider, from September 1988 to March 2013. Mr. Beggs’s leadership experience in the auto transport and logistics industry qualifies him to serve on our Board.

Brad Wright will become our Chief Financial Officer upon completion of this offering. Mr. Wright was most recently the Chief Financial Officer and a member of the Board of Directors of PMC Consolidated Holdings, LLC, the parent company of Protect My Car, a Crestview Partners portfolio company (until its sale that closed in August 2023) providing extended auto warranty plans to consumers, since September 2018. From September 2017 through March 2018, Mr. Wright was the interim Chief Financial Officer of Eurasia Group, a global consultancy firm. From February 2008 through July 2017, Mr. Wright served as Executive Vice President, Chief Financial Officer and Chief Administrative Officer of FBR & Co., the NASDAQ-listed parent company of Friedman, Billings Ramsey Capital Markets & Co., an investment banking and institutional brokerage firm. Mr. Wright is also a member of the Board of Directors for Redzone Technologies, LLC, a privately held provider of cybersecurity services. Mr. Wright earned a bachelor’s degree in Business Administration with an emphasis in Accounting from Nebraska Wesleyan University (1982).

Charles A. Alutto will become a director upon completion of this offering. Mr. Alutto has served as an operating executive with The Halifax Group, a private equity group, since October 2021. Mr. Alutto served as Chief Executive Officer of Sierra Lake Acquisition Corp., a blank-check special purpose acquisition corporation, from September 2021 until December 2022. From 2013 through 2019, Mr. Alutto was President and Chief Executive Officer of Stericycle Inc. (NASDAQ: SRCL), or Stericycle, a compliance company that specializes in collecting and disposing regulated wastes and document destruction services. His previous roles at Stericycle included serving as President, Stericycle, US Healthcare Compliance Solutions from 2010 to 2013, Vice President & Managing Director of Stericycle Europe from 2008 to 2010, Vice President of Healthcare Sales & Marketing from 2007 to 2008, and Area Vice President of Operations from 2004 to 2007, Area Vice President of Sales from 1999 to 2004, and Director of Sales and Marketing from 1997 to 1999. Before joining Stericycle, Mr. Alutto worked at Environmental Control Co., a medical waste and compliance service provider, from 1988 to 1997. Mr. Alutto served on Stericycle’s board of directors from 2012 to 2019 and currently serves as an independent board member of Southern Exteriors, a new home and residential remodeling company specializing in all types of residential exteriors. Mr. Alutto has an MBA from St. John’s University and a bachelor’s degree in Finance from Providence College. Mr. Alutto’s extensive background and leadership experience in various industries make him qualified to serve on our Board.

Douglas L. Col will become a director upon completion of this offering. Mr. Col has served as Executive Vice President & Chief Financial Officer of Saia, a transportation company providing less-than-truckload and other value-added services, including non-asset truckload, expedited and logistics services across North America, since April 2020, and as Treasurer of Saia from January 2014 through April 2020. Prior to joining Saia, Mr. Col spent over 20 years with transportation-related businesses as a transportation investment banker (Cowen and Company from January 2012 through December 2013), as a transportation equity analyst (Wellspring Management from August 2006 through October 2011 and Morgan Keegan & Company from June 1994 through August 2004) and as an equity fund manager (Redrock Partners, LLC from August 2004 through August 2006). Mr. Col received his MBA from Vanderbilt University — Owen Graduate School of Management and a Bachelor of Science in Civil Engineering from the Georgia Institute of Technology. Mr. Col’s over 20 years of experience in operations, strategy and corporate development in transportation-related industries qualifies him to serve on our Board.

James B. Gattoni will become a director upon completion of this offering. Mr. Gattoni has served as President and Chief Executive Officer of Landstar System, Inc. (NASDAQ: LSTR) (“Landstar”), a worldwide, technology-enabled, asset-light provider of integrated transportation management solutions since 2014. From November 1995 through May 2021, Mr. Gattoni served in various capacities for Landstar, including as chief financial officer from 2007 through

2014. Prior to joining Landstar, Mr. Gattoni was a certified public accountant in audit with KPMG for approximately eight years. Mr. Gattoni received a bachelor’s degree in Accounting from Ramapo College. Mr. Gattoni’s 28 years of management and financial experience in the transportation industry qualifies him to serve on our Board.

Steven F. Lux will become a director upon completion of this offering. Mr. Lux is a Founder and Managing Partner at Topmark Partners, a growth equity firm based in Tampa, Florida, which spun out of Stonehenge Capital in 2013. Mr. Lux has been a director of Proficient Transport since 2004 and an investor through BOCF, LLC, which was managed by Stonehenge Capital. BOCF, LLC owns 40% of Proficient Transport. From November 1998 through June 2013, Mr. Lux was a Managing Director of Stonehenge Capital, a growth equity fund. Prior to 1998, Mr. Lux spent 17 years with Bank One and its predecessor in Dallas, where he led a team of commercial lenders that focused on and originated over $500 million of middle market buyouts and financed technology-enabled businesses. He later joined Bank One’s Capital Markets Group, where he originated venture capital, private equity, and corporate finance transactions throughout Texas and the Southwest. Mr. Lux has both an MBA in Finance and Accounting and a Bachelor of Arts in Economics from Tulane University. Mr. Lux’s experience in finance, accounting and maximizing efficiencies qualify him to serve on our Board.

John F. Schraudenbach is a partner with The Goodwin Group, an executive retained search firm. Prior to joining Goodwin, Mr. Schraudenbach was an audit partner at Ernst & Young until his retirement in June 2019. In addition to his audit responsibilities, Mr. Schraudenbach served in a variety of regional and national leadership positions. Mr. Schraudenbach currently serves on the board of OneWater Marine Inc. (NASDAQ: ONEW), a publicly traded marine retailer, where he is the Chairman of the Board and previously served as the Audit Committee Chair. He is also the Audit Committee Chair for Printpack, Inc, a private manufacturer of packaging materials for consumer products and other industries. Mr. Schraudenbach serves on the University of Georgia Foundation Board as well as various other civic organizations. Mr. Schraudenbach received both a bachelor’s and Master of Accounting from the University of Georgia. He was a Certified Public Accountant. Our Board believes Mr. Schraudenbach is qualified to serve on our Board because of his substantial accounting, financial and business expertise.

John Skiadas will become a director upon completion of this offering. Mr. Skiadas is the President and Chief Executive Officer and owner of Delta Automotive Services, Inc., doing business as Delta Auto Transport which he founded in 1999. Mr. Skiadas earned his bachelor’s degree from the University of Maryland, studying Transportation and Logistics. Mr. Skiadas’ industry knowledge, market expertise and leadership experience qualify him to serve on our Board.

Composition of Our Board of Directors

Our business and affairs are managed under the direction of our Board. The primary responsibilities of our Board are to provide oversight, strategic guidance, counseling and direction to our management. Our Board meets on a regular basis and additionally as required. Upon the closing of this offering, our Board will consist of seven directors.

Family Relationship

There are no family relationships among any of our directors and executive officers.

Director Independence

Our Board has undertaken a review of the independence of each director. Based on information provided by each director concerning her or his background, employment and affiliations, including family relationships, our Board has determined Messrs. Alutto, Col and Schraudenbach are independent. In making these determinations, our Board considered the current and prior relationships that each non-employee director has with our company and all other facts and circumstances our Board deemed relevant in determining their independence, including the beneficial ownership of our shares by each non-employee director and the transactions described in the section titled “Certain Relationships and Related Person Transactions.”

Committees of Our Board of Directors

Our Board has the authority to appoint committees to perform certain management and administration functions. Upon the closing of this offering, our Board will have an audit committee, a compensation committee and a nominating and corporate governance committee. The composition and responsibilities of each of the committees of our Board

are described below. Members serve on these committees until their resignation or until otherwise determined by our Board. Each committee intends to adopt a written charter that satisfies the application rules and regulations of the SEC and the listing standards of the Nasdaq Stock Market, which we will post to our website at         upon the closing of this offering. Our Board may establish other committees as it deems necessary or appropriate from time to time. Information contained on, or accessible through, our website is not a part of this prospectus, and the inclusion of our website address in this prospectus is only an inactive textual reference.

Audit Committee

Our audit committee will consist of Messrs. Schraudenbach (Chair), Alutto and Gattoni, all of whom our Board has determined satisfies the independence requirements under the listing standards of the Nasdaq Stock Market and Rule 10A-3(b)(1) of the Securities Exchange Act of 1934, as amended (“Exchange Act”). Our board of directors has determined that each of Messrs. Schraudenbach, Alutto and Gattoni is an “audit committee financial expert” within the meaning of SEC regulations. Each member of our audit committee can read and understand fundamental financial statements in accordance with applicable requirements. In arriving at these determinations, the Board has examined each audit committee member’s scope of experience and the nature of their employment in the corporate finance sector.

The primary purpose of the audit committee is to discharge the responsibilities of our Board with respect to our corporate accounting and financial reporting processes, systems of internal control and financial-statement audits, and to oversee our independent registered accounting firm. Specific responsibilities of our audit committee include:

•        helping our Board oversee our corporate accounting and financial reporting processes;

•        managing the selection, engagement, qualifications, independence and performance of a qualified firm to serve as the independent registered public accounting firm to audit our financial statements;

•        discussing the scope and results of the audit with the independent registered public accounting firm and reviewing, with management and the independent accountants, our interim and year-end operating results;

•        developing procedures for employees to submit concerns anonymously about questionable accounting or audit matters;

•        reviewing and overseeing related person transactions;

•        reviewing policies on risk assessment and risk management;

•        obtaining and reviewing a report by the independent registered public accounting firm, at least annually, that describes our internal quality control procedures, any material issues with such procedures, and any steps taken to deal with such issues when required by applicable law; and

•        approving, or, as permitted, pre-approving, audit and permissible non-audit services to be performed by the independent registered public accounting firm.

Compensation Committee

Our compensation committee currently consists of Messrs. Gattoni (Chair), Col and Schraudenbach. Our Board has determined that each member of our compensation committee is independent under the listing standards of the Nasdaq Stock Market and SEC rules and regulations.

The primary purpose of our compensation committee is to discharge the responsibilities of our Board in overseeing our compensation policies, plans and programs and to review and determine the compensation to be paid to our executive officers and directors. Specific responsibilities of our compensation committee include:

•        reviewing and recommending to our Board the compensation of our chief executive officer;

•        reviewing and approving the compensation of our executive officers, other than our chief executive officer;

•        reviewing and recommending to our Board the compensation paid to our directors;

•        administering our equity incentive plans and other benefit programs;

•        reviewing, adopting, amending and terminating, incentive compensation and equity plans, severance agreements, profit sharing plans, bonus plans, change-of-control protections and any other compensatory arrangements for our executive officers;

•        reviewing, evaluating and recommending to our Board succession plans for our executive officers; and

•        reviewing and establishing general policies relating to compensation and benefits of our employees, including our overall compensation strategy, including base salary, incentive compensation and equity-based grants, to assure that they promote stockholder interests and support our strategic objectives, and that they provide for appropriate rewards and incentives for our management and employees.

Nominating and Corporate Governance Committee

Our nominating and corporate governance committee will consist of Messrs. Alutto (Chair), Col and Schraudenbach. Our Board has determined that Messrs. Alutto, Col and Schraudenbach are independent under the listing standards of the Nasdaq Stock Market.

Specific responsibilities of our nominating and corporate governance committee include:

•        identifying and evaluating candidates, including the nomination of incumbent directors for reelection and nominees recommended by stockholders, to serve on our Board;

•        considering and making recommendations to our Board regarding the composition and chairmanship of the committees of our Board;

•        instituting plans or programs for the continuing education of our Board and orientation of new directors;

•        developing and making recommendations to our Board regarding corporate governance guidelines and matters; and

•        overseeing periodic evaluations of the Board’s performance.

Risk Oversight

Our Audit Committee is responsible for overseeing our risk management process. The Audit Committee focuses on our general risk management strategy and the most significant risks facing us and ensures that appropriate risk mitigation strategies are implemented by management. The Audit Committee reports any significant issues to the Board as part of the board of directors’ general oversight responsibility. Our management is responsible for day-to-day risk management. This oversight includes identifying, evaluating and addressing potential risks that may exist at the enterprise, strategic, financial, operational, compliance and reporting levels.

Code of Business Conduct and Ethics

In connection with this offering, we intend to adopt a written Code of Business Conduct and Ethics that applies to all our employees, officers and directors. This includes our principal executive officer, principal financial officer and principal accounting officer or controller, or persons performing similar functions. The full text of our Code of Business Conduct and Ethics will be posted on our website at            upon the closing of this offering. We intend to disclose on our website any future amendments of our Code of Business Conduct and Ethics or waivers that exempt any principal executive officer, principal financial officer, principal accounting officer or controller, persons performing similar functions or our directors from provisions in the Code of Business Conduct and Ethics.

Compensation Committee Interlocks and Insider Participation

None of the members of the compensation committee is currently, or has been at any time, one of our executive officers or employees. None of our executive officers currently serves, or has served during the last completed fiscal year, as a member of the Board or compensation committee of any entity that has one or more executive officers serving as a member of our Board or compensation committee.

EXECUTIVE COMPENSATION

Proficient was incorporated in June 2023 and has not conducted any operations other than those activities related to the acquisition of the Founding Companies and this offering. For the fiscal year ended December 31, 2023, no compensation was paid or accrued to either of Proficient’s two executive officers, Messrs. Berner (CEO) or McKinney (Secretary). Proficient had no other executive officers from inception to December 31, 2023.

In fiscal year 2023, Randy Beggs, who is the current Chief Executive Officer of Proficient Transport and will be our President and Chief Operating Officer after the closing of the offering, received a base salary of $325,000 from Proficient Transport and was eligible to receive an annual performance bonus.

Upon consummation of this offering, Messrs. Berner and McKinney will step down as executive officers, but will both remain employees of the Company in a business development capacity. As described in greater detail below, we have entered into employment agreements with Mr. O’Dell, who will serve as our Chief Executive Officer after the closing of this offering, pursuant to which Mr. O’Dell will receive an annual base salary of $650,000 beginning in fiscal year 2024, and will be eligible to participate in, and receive an initial award under, the Company’s long-term incentive program, with Mr. Beggs, who will serve as our President and Chief Operating Officer after this closing of the offering, pursuant to which Mr. Beggs will receive an annual base salary of $500,000 beginning in fiscal year 2024 and will be eligible to receive an annual performance bonus, and Brad Wright, who will serve as our Chief Financial Officer after the closing of this offering, pursuant to which Mr. Wright will receive an annual base salary of $375,000 beginning in fiscal year 2024 and will be eligible to receive an annual performance bonus.

Employment Agreements

We will have employment agreements with each of Richard O’Dell, our Chief Executive Officer Nominee, Randy Beggs, our President and Chief Operating Officer Nominee, and Brad Wright, our Chief Financial Officer Nominee. Pursuant to such agreements, each executive will commence employment with us effective upon the closing of this offering, and be entitled to receive a base salary and will be eligible to receive performance awards or bonuses as determined by the Board. The annual base salaries of the executives are as follows: Mr. O’Dell — $650,000, Mr. Beggs — $500,000 and Mr. Wright — $375,000. Each of Messrs. Beggs and Wright will also be eligible to receive an annual cash bonus equal to the percentage of his salary set forth below based upon the Company meeting certain financial performance targets to be set by the Board:

Mr. O’Dell will also be eligible to receive a long-term incentive performance bonus under the 2024 Plan (described in greater detail below) equal to up to three times his annual base salary beginning in fiscal year 2024 based upon the Company meeting certain long-term financial and other performance targets to be set by the Board.

In connection with this offering, Mr. O’Dell will receive an initial award of restricted shares of common stock or restricted stock units equal to five percent of our outstanding shares upon completion of this offering. One-third of the shares/units will vest immediately upon the completion of this offering and the remaining two-thirds of the shares/units will vest equally on each of the first, second, third, fourth, and fifth anniversaries of the completion of this offering, subject to continued employment with us; provided, however, that vesting will accelerate in the event of Mr. O’Dell’s retirement (as defined in the applicable award agreement) on or after the second anniversary of the completion of this offering, subject to continued employment with us. In connection with this offering, Messrs. Beggs and Wright will also receive an award of restricted shares of common stock or restricted stock units with a value equal to $1,200,000 and $1,325,000, respectively, with the number of shares/units determined by dividing the dollar value by the price to public of our common stock in this offering. One-third of the shares will vest on each of the first, second and third anniversaries of the completion of this offering, generally subject to continued employment with us.

Effective upon completion of this offering, Mr. Wright will also receive a one-time transaction success bonus of $75,000 that will be paid in cash, subject to continued employment through the payment date.

Unless an exception applies, our Corporate Governance Guidelines require our executive officers to own shares of our common stock equal to three times such executive officer’s annual base salary and bonus (based on the fair market value of our common stock). The Company agreed that Mr. Beggs will be required to own shares of our common stock equal to two times his annual base salary. Each executive officer has until the fifth anniversary of his or her initial appointment to achieve this minimum ownership threshold. Executive officers may not sell any shares paid to them as compensation unless they meet the foregoing minimum ownership thresholds at the time of sale, other than shares sold or withheld to pay taxes on a prior years’ compensation.

Each employment agreement has an initial term of three years (beginning on the date of the completion of this offering), unless terminated by either party prior to the end of such initial term. Each agreement also may be terminated upon the death or disability of the executive or for “cause” upon notice by us to the executive. The employment agreements provide that if the executive is terminated without cause or resigns for “good reason,” such executive will be paid a severance amount in accordance with our regular pay schedule equal to the annual base salary paid to such executive for the following periods: Mr. Beggs — one year, Mr. Wright — one year and Mr. O’Dell — one year (not to exceed $650,000). Mr. O’Dell will also become immediately vested in the unvested portion(s) of his initial award of restricted shares of common stock or restricted stock units. The employment agreements contain covenants not to compete with us and covenants not to solicit our employees or customers for a period of two years following termination of the agreements.

Outstanding Equity Awards as of December 31, 2023

We had no outstanding equity awards as of December 31, 2023.

Emerging Growth Company Status

We are an “emerging growth company,” as defined in the JOBS Act. As an emerging growth company we will be exempt from certain requirements related to executive compensation, including the requirements to hold a nonbinding advisory vote on executive compensation and to provide information relating to the ratio of total compensation of our chief executive officer to the median of the annual total compensation of all of our employees, each as required by the Investor Protection and Securities Reform Act of 2010, which is part of the Dodd-Frank Wall Street Reform and Consumer Protection Act.

Equity Benefit Plans

We believe that our ability to grant equity-based awards is a valuable and necessary compensation tool that aligns the long-term financial interests of our employees and directors with the financial interests of our stockholders. In addition, we believe that our ability to grant options and other equity-based awards helps us to attract, retain and motivate employees and directors, and encourages them to devote their best efforts to our business and financial success. The principal features of our equity incentive plans are summarized below. These summaries are qualified in their entirety by reference to the actual text of the plans, which are filed as exhibits to the registration statement of which this prospectus forms a part.

2024 Long-Term Incentive Plan

In connection with this offering, we will adopt the Proficient Auto Logistics, Inc. 2024 Long-Term Incentive Plan (“2024 Plan”). We expect our 2024 Plan will become effective prior to and in connection with the execution of the underwriting agreement for this offering.

Types of Awards.    Our 2024 Plan provides for the grant of incentive stock options (“ISOs”) to employees, including employees of any parent or subsidiary, and for the grant of nonstatutory stock options (“NSOs”), stock appreciation rights, restricted stock awards, restricted stock unit awards, performance awards and other forms of stock awards to employees and directors, including employees of our affiliates.

Authorized Shares.    Initially, the maximum number of shares of our common stock that may be issued under our 2024 Plan after it becomes effective will not exceed 3,260,000 shares. The maximum number of shares of our common stock that may be issued on the exercise of ISOs under our 2024 Plan is 3,260,000.

Shares subject to stock awards granted under our 2024 Plan that expire or terminate without being exercised in full, or that are paid out in cash rather than in shares, do not reduce the number of shares available for issuance under our 2024 Plan. Additionally, shares become available for future grants under our 2024 Plan if they were stock awards issued under our 2024 Plan and we repurchase them or they are forfeited. This includes shares used to pay the exercise price of a stock award or to satisfy the tax withholding obligations related to a stock award.

Plan Administration.    Our Board, or a duly authorized committee of our Board, will administer our 2024 Plan. Our Board may also delegate to one or more persons or bodies the authority to do one or more of the following: (i) designate recipients (other than officers) of specified stock awards, provided that no person or body may be delegated authority to grant a stock award to themselves; (ii) determine the number of shares subject to such stock award; and (iii) determine the terms of such stock awards. Under our 2024 Plan, our Board has the authority to determine and amend the terms of awards and underlying agreements, including:

•        recipients;

•        the exercise, purchase or strike price of stock awards, if any;

•        the number of shares subject to each stock award;

•        the vesting schedule applicable to the awards, together with any vesting acceleration; and

•        the form of consideration, if any, payable on exercise or settlement of the award.

Stock Options.    ISOs and NSOs are granted under stock option agreements adopted by the plan administrator. The plan administrator determines the exercise price for stock options, within the terms and conditions of the 2024 Plan, provided that the exercise price of a stock option generally cannot be less than 100% of the fair market value of our common stock on the date of grant. Options granted under the 2024 Plan vest at the rate specified in the stock option agreement as determined by the plan administrator.

Tax Limitations on ISOs.    The aggregate fair market value, determined at the time of grant, of our common stock with respect to ISOs that are exercisable for the first time by an optionholder during any calendar year under all of our stock plans may not exceed $100,000. Options or portions thereof that exceed such limit will generally be treated as NSOs. No ISO may be granted to any person who, at the time of the grant, owns or is deemed to own stock possessing more than 10% of our total combined voting power or that of any of our affiliates unless (i) the option exercise price is at least 110% of the fair market value of the stock subject to the option on the date of grant and (ii) the option is not exercisable after the expiration of five years from the date of grant.

Restricted Stock Unit Awards.    Restricted stock units are granted under restricted stock unit award agreements adopted by the plan administrator. Restricted stock units may be granted in consideration for any form of legal consideration that may be acceptable to our Board and permissible under applicable law. A restricted stock unit may be settled by cash, delivery of stock, a combination of cash and stock as deemed appropriate by the plan administrator, or in any other form of consideration set forth in the restricted stock unit agreement. Additionally, dividend equivalents may be credited in respect of shares covered by a restricted stock unit. Except as otherwise provided in the applicable award agreement, restricted stock units that have not vested will be forfeited once the participant’s continuous service ends for any reason.

Restricted Stock Awards.    Restricted stock awards are granted under restricted stock award agreements adopted by the plan administrator. A restricted stock award may be awarded in consideration for cash, check, bank draft or money order, past services to us, or any other form of legal consideration that may be acceptable to our Board and permissible under applicable law. The plan administrator determines the terms and conditions of restricted stock awards, including vesting and forfeiture terms. If a participant’s service relationship with us ends for any reason, we may receive any or all of the shares of our common stock held by the participant that have not vested as of the date the participant terminates service with us through a forfeiture condition or a repurchase right.

Stock Appreciation Rights.    Stock appreciation rights are granted under stock appreciation grant agreements adopted by the plan administrator. The plan administrator determines the purchase price or strike price for a stock appreciation right, which generally cannot be less than 100% of the fair market value of our common stock on the date of grant. A stock appreciation right granted under the 2024 Plan vests at the rate specified in the stock appreciation right agreement as determined by the plan administrator.

Performance Awards.    The 2024 Plan permits the grant of performance-based stock and cash awards. The plan administrator may structure awards so that the shares of our stock, cash, or other property will be issued or paid only following the achievement of certain pre-established performance goals during a designated performance period. The performance criteria that will be used to establish such performance goals may be based on any one of, or combination of, the following as determined by the plan administrator: earnings (including earnings per share and net earnings); earnings before interest, taxes and depreciation; earnings before interest, taxes, depreciation and amortization; total stockholder return; return on equity or average stockholder’s equity; return on assets, investment, or capital employed; share price; margin (including gross margin); income (before or after taxes); operating income; operating income after taxes; pre-tax profit; operating cash flow; sales or revenue targets; increases in revenue; expenses and cost reduction goals; improvement in or attainment of working capital levels; economic value added (or an equivalent metric); market share; cash flow; cash flow per share; share price performance; debt reduction; customer satisfaction; stockholder’s equity; capital expenditures; debt levels; operating profit or net operating profit; growth of net income or operating income; billings; stockholder liquidity; corporate governance and compliance; personnel matters; budget management; internal controls, including those related to the Sarbanes-Oxley Act of 2002; investor relations, analysts and communication; strategic partnerships or transactions; individual performance goals; corporate development and planning goals; and other measures of performance selected by the plan administrator.

Unless specified otherwise (i) in the award agreement at the time the award is granted or (ii) in such other document setting forth the performance goals at the time the goals are established, we will appropriately make adjustments in the method of calculating the attainment of performance goals as follows: (1) to exclude restructuring and/or other nonrecurring charges; (2) to exclude exchange rate effects; (3) to exclude the effects of changes to generally accepted accounting principles; (4) to exclude the effects of any statutory adjustments to corporate tax rates; (5) to exclude the effects of items that are “unusual” in nature or occur “infrequently” as determined under generally accepted accounting principles; (6) to exclude the dilutive effects of acquisitions or joint ventures; (7) to assume that any business divested by us achieved performance objectives at targeted levels during the balance of a performance period following such divestiture; (8) to exclude the effect of any change in the outstanding shares of our common stock by reason of any stock dividend or split, stock repurchase, reorganization, recapitalization, merger, consolidation, spin-off, combination or exchange of shares or other similar corporate change, or any distributions to common stockholders other than regular cash dividends; (9) to exclude the effects of stock based compensation and the award of bonuses under our bonus plans; (10) to exclude costs incurred in connection with potential acquisitions or divestitures that are required to be expensed under generally accepted accounting principles; and (11) to exclude the goodwill and intangible asset impairment charges that are required to be recorded under generally accepted accounting principles. In addition, we retain the discretion to reduce or eliminate the compensation or economic benefit due upon attainment of the goals. The performance goals may differ from participant to participant and from award to award.

Other Stock Awards.    The plan administrator may grant other awards based in whole or in part by reference to our common stock. The plan administrator will set the number of shares under the stock award and all other terms and conditions of such awards.

Changes to Capital Structure.    In the event there is a specified type of change in our capital structure, such as a stock split, reverse stock split, or recapitalization, appropriate adjustments will be made to (i) the class and maximum number of shares reserved for issuance under the 2024 Plan, (ii) the class and maximum number of shares that may be issued on the exercise of ISOs, and (iii) the class and number of shares and exercise price, strike price, or purchase price, if applicable, of all outstanding stock awards.

Changes in Control.    The following applies to stock awards under the 2024 Plan in the event of a change in control, unless otherwise provided in a participant’s stock award agreement or other written agreement with us or one of our affiliates or unless otherwise expressly provided by the plan administrator at the time of grant.

In the event of a change in control, other than a dissolution or liquidation that qualifies as a change in control, any stock awards outstanding under the 2024 Plan may be assumed, continued or substituted for by any surviving or acquiring corporation (or its parent company), and any reacquisition or repurchase rights held by us with respect to the stock award may be assigned to the successor (or its parent company). If the surviving or acquiring corporation (or its parent company) does not assume, continue or substitute for such stock awards, then with respect to any such stock awards that are held by participants, the occurrence of a change in control shall have the effect, if any, with respect to any award as set forth in the current participant’s award agreement or, to the extent not prohibited by the 2024 Plan or the current participant’s award agreement, as provided by our Board.

In the event of a dissolution or liquidation that qualifies as a change in control, all outstanding stock awards (other than stock awards consisting of vested and outstanding shares of common stock not subject to a forfeiture condition or our right of repurchase) will terminate immediately prior to the completion of such dissolution or liquidation, and the shares of common stock subject to our repurchase rights or subject to a forfeiture condition may be repurchased or reacquired by us notwithstanding the fact that the stock award is held by a participant whose continuous service has not terminated prior to the effective time of the dissolution or liquidation. However, the plan administrator may provide, in its sole discretion, that some or all of such stock awards become fully vested, exercisable and/or no longer subject to repurchase or forfeiture (to the extent such stock awards have not previously expired or terminated) before the dissolution or liquidation is completed but contingent on its completion.

Under the 2024 Plan, a change in control is defined to include: (i) the acquisition by any person or company of more than 50% of either our then outstanding stock or the combined voting power of our then outstanding stock; (ii) a consummated reorganization, merger, consolidation acquisition, share exchange, or similar transaction in which our stockholders immediately before the transaction do not own more than 50% of the combined voting power of the surviving entity (or the parent of the surviving entity); (iii) a complete dissolution or liquidation providing for the sale or distribution of substantially all of our assets; (iv) a consummated sale of all or substantially all of our assets; and (v) an unapproved change in the majority of the Board.

Transferability.    A participant may not transfer stock awards under our 2024 Plan other than by will, the laws of descent and distribution, or as otherwise provided under our 2024 Plan.

Plan Amendment or Termination.    Our Board has the authority to amend, suspend, or terminate our 2024 Plan, provided that such action does not materially impair the existing rights of any participant without such participant’s written consent. Certain material amendments also require the approval of our stockholders. No ISOs may be granted after the tenth anniversary of the date our Board adopted our 2024 Plan. No stock awards may be granted under our 2024 Plan while it is suspended or after it is terminated.

Limitations on Liability and Indemnification

Our amended and restated certificate of incorporation, which will become effective immediately prior to the closing of this offering, will contain provisions that limit the liability of our current and former directors and officers for monetary damages to the fullest extent permitted by Delaware law. Delaware law provides that directors and officers of a corporation will not be personally liable for monetary damages for any breach of fiduciary duties as directors or officers, except liability for:

•        any breach of the director’s or officer’s duty of loyalty to the corporation or its stockholders;

•        any act or omission not in good faith or that involves intentional misconduct or a knowing violation of law;

•        as a director, unlawful payments of dividends or unlawful stock repurchases or redemptions;

•        as an officer, derivative claims brought on behalf of the corporation by a stockholder; or

•        any transaction from which the director or officer derived an improper personal benefit.

Such limitation of liability does not apply to liabilities arising under federal securities laws and does not affect the availability of equitable remedies such as injunctive relief or rescission.

Our amended and restated certificate of incorporation will authorize us to indemnify our directors, officers, employees and other agents to the fullest extent permitted by Delaware law. Our amended and restated bylaws will provide that we are required to indemnify our directors and officers to the fullest extent permitted by Delaware law and may indemnify our other employees and agents. Our amended and restated bylaws will also provide that, on satisfaction of certain conditions, we will advance expenses incurred by a director or officer in advance of the final disposition of any action or proceeding, and permit us to secure insurance on behalf of any officer, director, employee, or other agent for any liability arising out of his or her actions in that capacity regardless of whether we would otherwise be permitted to indemnify him or her under the provisions of Delaware law. We have entered and expect to continue to enter into agreements to indemnify our directors, executive officers and other employees as determined by the Board. With certain exceptions, these agreements provide for indemnification for related expenses including attorneys’ fees, judgments, fines and settlement amounts incurred by any of these individuals in any action or proceeding.

We believe that the indemnification provisions in our amended and restated certificate of incorporation and amended and restated bylaws and in the indemnification agreements are necessary to attract and retain qualified persons as directors and officers. We also maintain customary directors’ and officers’ liability insurance.

The limitation of liability and indemnification provisions in our amended and restated certificate of incorporation and amended and restated bylaws may discourage stockholders from bringing a lawsuit against our directors for breach of their fiduciary duty. They may also reduce the likelihood of derivative litigation against our directors and officers, even though an action, if successful, might benefit us and other stockholders. Further, a stockholder’s investment may be adversely affected to the extent that we pay the costs of settlement and damage awards against directors and officers as required by these indemnification provisions.

Insofar as indemnification for liabilities arising under the Securities Act may be permitted for directors, executive officers, or persons controlling us, we have been informed that, in the opinion of the SEC, such indemnification is against public policy as expressed in the Securities Act and is therefore unenforceable.

Rule 10b5-1 Plans

Our directors, officers and key employees may adopt written plans, known as Rule 10b5-1 plans, in which they will contract with a broker to buy or sell shares of our common stock on a periodic basis. Under a Rule 10b5-1 plan, a broker executes trades under parameters established by the director or officer when entering into the plan, without further direction from them. The director or officer may amend a Rule 10b5-1 plan in some circumstances and may terminate a plan at any time. Our directors and executive officers may also buy or sell additional shares outside of a Rule 10b5-1 plan when they do not possess of material nonpublic information, subject to compliance with the terms of our insider trading policy.

CERTAIN RELATIONSHIPS AND RELATED PERSON TRANSACTIONS

The following includes a summary of transactions that occurred in the last two years and any currently proposed transactions to which we have been or are to be a party in which the amount involved exceeded or will exceed $120,000, and in which any of our directors, executive officers or, to our knowledge, beneficial owners of more than 5% of our capital stock or any member of the immediate family of any of the foregoing persons had or will have a direct or indirect material interest, other than equity and other compensation, arrangements which are described under the sections titled “Executive Compensation” and “Management — Non-Employee Director Compensation.”

Organization of the Company

In connection with our formation, we issued to the Company’s co-founders, Messrs. Berner and McKinney, and family members, an aggregate of 2,571,930 shares of common stock for cash consideration of $1,000 each. Messrs. Berner and McKinney have agreed with us not to sell any shares acquired until six months following the date of this Prospectus, when at such time the restrictions expire for 50% of the shares, with the 50% not eligible for sale until nine months.

Prior to the offering, we issued an aggregate of 367,200 shares of common stock to private investors for an aggregate consideration of $960,000. Mr. Alutto, one of our director nominees, purchased 38,250 shares for an aggregate consideration of $100,000. Mr. O’Dell, one of our director nominees and our chief executive officer nominee, purchased 95,625 shares for an aggregate consideration of $250,000. All of the investors in this private placement have agreed with us not to sell any shares acquired in such private placement for the period ending one year from the date of this Prospectus.

The Combinations with the Founding Companies

Although the following summarizes the material terms of the Combination Agreements, it does not purport to be complete in all respects and is subject to, and qualified in its entirety by, the full text of the Combination Agreements (as defined below), a copy of each of which is filed as an exhibit to the registration statement of which this prospectus forms a part. Additionally, the following summary discusses the Combination Agreements in general terms and does not identify all the instances where one Combination Agreement may differ from another. Other than the amount of consideration to be received, the structural differences between some of the Combination Agreements and certain provisions described at the end of this section, all of the Combinations are substantially similar.

General

We have entered into Combination Agreements, directly or through a wholly owned subsidiary, with the shareholders or equity interest holders of ten entities comprising the five Founding Companies (the “Combination Agreements”). Concurrently with and conditioned upon the closing of this offering, we will close the Combinations and acquire all of the issued and outstanding shares of stock and other equity interests of each of the entities comprising the five Founding Companies through stock or equity interest purchase, contribution of shares or mergers. As a result, at the completion of the Combinations, all of the Founding Companies will become direct or indirect wholly owned subsidiaries of Proficient. As we intend to operate all operations under one integrated transportation management software and route planning software, as well as centralizing certain administrative functions at our headquarters in Jacksonville, Florida, we do not expect competition to arise among our subsidiaries.

We agreed on the consideration that we are paying in the Combinations during arm’s length negotiations with the shareholders or equity interest holders of each Founding Company. In determining and negotiating the consideration to be paid in the Combinations to each of the individual Founding Companies, we relied on the experience and judgment of Messrs. Berner and McKinney, who leveraged their 20 years of experience in investing in public securities across multiple industries, including transportation and logistics companies. Their evaluation considered a variety of metrics including, a review of enterprise value/EBITDA, enterprise value/EBITDA-capex, free cash flow multiples and sustainability of revenues and operating margins. The individual valuations did not factor in any presumed synergies from the completed Combinations. We did not obtain independent valuations, appraisals or fairness opinions to support the consideration that we agreed to pay.

The various Combination Agreements are briefly described below:

•        Delta Membership Interest Purchase Agreement. We entered into an agreement with PAL Stock Acquiror, Inc., a Delaware corporation and our wholly owned subsidiary (“PAL Stock Acquiror”), John Skiadas, Delta and, following its execution of a joinder, a newly formed Delaware corporation owned by John Skiadas (“Seller”). Under the agreement PAL Stock Acquiror agreed to purchase 54.22% of the membership interest of Delta, following its conversion to a limited liability company as part of pre-closing restructuring.

•        Delta Contribution Agreement. We entered into a contribution agreement with John Skiadas, Delta Auto Brokers, LLC, a New Jersey limited liability company (“DAB”), North East Fleet Services, Inc., a New Jersey corporation (“NEF”), Delta and, following its execution of a joinder agreement, Seller. Under the terms of the agreement, we agreed to issue certain shares of our common stock in exchange for DAB and NEF contributing all of their equity interests to us and Delta contributing 45.78% of its membership interests to us, following its conversion to a limited liability company as part of pre-closing restructuring.

•        Deluxe Stock Purchase Agreement. We entered into a purchase agreement with PAL Stock Acquiror, Jesus Holguin, Raul Silva, and Deluxe, pursuant to which PAL Stock Acquiror agreed to purchase all of the equity interests of Deluxe.