UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

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

For the quarterly period ended: March 31, 2025

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

For the transition period from ____________ to _____________

Commission File Number: 001-42471

TOPPOINT HOLDINGS INC.

(Exact name of registrant as specified in its charter)

Nevada		92-2375560
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

1250 Kenas Road, North Wales, PA		19454
(Address of principal executive offices)		(Zip Code)

551-866-1320

(Registrant’s telephone number, including area code)

(Former name or former address, if changed since last report)

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

Title of each class		Trading Symbol(s)		Name of each exchange on which registered
Common Stock, par value $0.0001 per share		TOPP		NYSE American LLC

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

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

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

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

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

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

As of May 15, 2025, there were 17,500,000 shares of the registrant’s common stock outstanding.

TOPPOINT HOLDINGS INC.

Quarterly Report on Form 10-Q

Period Ended March 31, 2025

TABLE OF CONTENTS

	PART I
	FINANCIAL INFORMATION
Item 1.	Financial Statements	F-1
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	1
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	9
Item 4.	Controls and Procedures	9
PART II
OTHER INFORMATION
Item 1.	Legal Proceedings	10
Item 1A.	Risk Factors	10
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds.	10
Item 3.	Defaults Upon Senior Securities	10
Item 4.	Mine Safety Disclosures	10
Item 5.	Other Information	10
Item 6.	Exhibits	10

PART I

FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS.

TOPPOINT HOLDINGS INC.

UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

		Page

Condensed Consolidated Balance Sheets as of March 31, 2025 (unaudited) and December 31, 2024		F-2
Condensed Consolidated Statements of Operations for the Three Months Ended March 31, 2025 and 2024 (unaudited)		F-3
Condensed Consolidated Statements of Stockholders’ Equity for the Three Months Ended March 31, 2025 and 2024 (unaudited)		F-4
Condensed Consolidated Statements of Cash Flows for the Three Months Ended March 31, 2025 and 2024 (unaudited)		F-5
Notes to the Unaudited Condensed Consolidated Financial Statements		F-6

F-1

TOPPOINT HOLDINGS INC.

Condensed Consolidated Balance Sheets

	March 31, 2025 (Unaudited)		December 31, 2024

Assets
Current Assets
Cash	$	1,739,834	$	557,619
Accounts receivable, net		1,165,535		1,203,001
Contract assets		390,793		88,153
Deferred offering costs		-		398,512
Prepaid expenses and other current assets		139,583		-
Total Current Assets		3,435,745		2,247,285
Other Assets
Property and equipment, net		1,787,113		1,191,572
Intangible asset, net		672,178		739,396
Note receivable		5,700,000		-
Right-of-use asset		629,070		675,561
Right-of-use asset – related party		177,567		82,098
Security deposit		61,000		50,000
Total Assets	$	12,462,673	$	4,985,912
Liabilities and Shareholders’ Equity
Current Liabilities
Accounts payable and accrued expenses	$	477,679	$	402,552
Income taxes payable		-		142,093
Loans payable, current maturities		3,147		3,147
Related party loan		1,100,000		1,100,000
Lease liability, current maturities		205,263		130,552
Total Current Liabilities		1,786,089		1,778,344
Loans payable, net of current maturities		146,753		146,753
Lease liability, net of current maturities		346,893		331,833
Deferred tax liability		108,819		187,108
Total Liabilities		2,388,554		2,444,038

Shareholders’ Equity
Preferred stock, $0.0001 par value, 50,000,000 authorized, 0 shares issued and outstanding at March 31, 2025 and December 31, 2024		-		-
Common stock, $0.0001 par value, 300,000,000 shares authorized, 17,500,000 and 15,000,000 shares issued and outstanding at March 31, 2025 and December 31, 2024, respectively		1,750		1,500
Additional paid-in capital		8,200,220		139,750
Retained earnings		1,872,149		2,400,624
Total Shareholders’ Equity		10,074,119		2,541,874
Total Liabilities and Shareholders’ Equity	$	12,462,673	$	4,985,912

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

F-2

TOPPOINT HOLDINGS INC.

Unaudited Condensed Consolidated Statements of Operations

	For The Three Months Ended March 31,
	2025			2024

Revenues	$	3,811,610		$	3,733,896

Costs and expenses
Costs of revenues		3,313,567			3,254,946
General and administrative expenses		905,160			331,055
Total costs and expenses		4,218,727			3,586,001

(Loss) income from operations		(407,117	)		147,895

Other (expense) income
Interest expense		(100,031	)		(1,369	)
Interest income		72,333			-
Total other (expense) income, net		(27,698	)		(1,369	)

(Loss) income before income taxes		(434,815	)		146,526

Provision for (benefit from) income taxes:
Current		171,949			13,367
Deferred		(78,289	)		22,069
		93,660			35,436

Net (loss) income	$	(528,475	)		111,090

Basic and diluted net (loss) income per share attributed to common stockholders	$	(0.03	)		0.01
Weighted Average Number of Shares Outstanding - Basic and Diluted		16,916,667			15,000,000

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

F-3

TOPPOINT HOLDINGS INC.

Unaudited Condensed Consolidated Statements of Shareholders’ Equity

	Common Stock				Additional Paid-in		Retained			Total Stockholders’
	Shares		Amount		Capital		Earnings			Equity
Balance – December 31, 2024		15,000,000	$	1,500	$	139,750	$	2,400,624		$	2,541,874
Issuance of Common Stock		2,500,000		250		8,060,470					8,060,720
Net loss							$	(528,475	)	$	(528,475	)
Balance - March 31, 2025		17,500,000	$	1,750	$	8,200,220	$	1,872,149		$	10,074,119

	Common Stock				Additional Paid-in		Retained		Total Stockholders’
	Shares		Amount		Capital		Earnings		Equity
Balance – January 1, 2024		15,000,000	$	1,500	$	139,750	$	2,225,753	$	2,367,003
Net income		-		-		-		111,090		111,090
Balance – March 31, 2024		15,000,000	$	1,500	$	139,750	$	2,336,843	$	2,478,093

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

F-4

TOPPOINT HOLDINGS INC.

Unaudited Condensed Consolidated Statements of Cash Flows

	For The Three Months Ended March 31,
	2025			2024
Cash flows from operating activities:
Net (loss) income	$	(528,475	)	$	111,090
Adjustments to reconcile from net (loss) income to net cash provided by (used in) operating activities:
Amortization of ROU		75,739			62,982
Depreciation		97,033			13,725
Deferred taxes		(78,289	)		22,069
Amortization		67,218
Changes in operating assets and liabilities
Accounts receivable		37,466			24,940
Contract asset		(302,640	)		(60,345	)
Prepaid and other current assets		(139,583	)		-
Security deposit		(11,000	)		-
Accounts payable and accrued expenses		75,126			(149,593	)
Income taxes payable		(142,093	)		13,367
Lease payable		(34,945	)		(22,546	)
Net cash (used in) provided by operating activities		(884,443	)		15,689

Cash flows from investing activities:
Note receivable		(5,700,000	)		-
Advances to stockholder		-			(22,918	)
Purchases of property and equipment		(692,574	)		-
Net cash used in investing activities		(6,392,574	)		(22,918	)

Cash flows from financing activities:
Deferred offering costs		-			(211,276	)
Issuance of common stock		8,459,232			-
Net cash provided by (used in) financing activities		8,459,232			(211,276	)

Net increase (decrease) in cash		1,182,215			(218,505	)
Cash, beginning of period		557,619			1,455,976
Cash, end of period	$	1,739,834		$	1,237,471

Supplemental disclosure of cash flow information:
Cash paid during the period for:		-			-
Interest	$	2,193		$
Income taxes	$	314,042		$	-

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

F-5

TOPPOINT HOLDINGS INC.

Notes to Unaudited Condensed Consolidated Financial Statements

NOTE 1: NATURE OF OPERATIONS

Nature of Operations

In these notes, the terms “it”, “its”, the “Company” refer to Toppoint Holdings Inc. The Company was incorporated during August 2022 in the State of Nevada. During September 2022, the Company entered into a Share Exchange Agreement with Toppoint, Inc. and its sole stockholder and Chief Executive Officer of the Company, Hok C. Chan (“Former Owner”), pursuant to which the sole stockholder exchanged all common stock in Toppoint, Inc. for 7,500,000 shares of common stock of the Company. As a result, the Company acquired all of the issued and outstanding shares of common stock of Toppoint, Inc., making its wholly-owned subsidiary (“Common Control Transfer”). The Former Owner owned 100% of Toppoint, Inc., and still effectively controls the Company after the merger. Since the exchange was a transaction between entities under common control, the net assets received by the Company were accounted for at historical cost as of January 1, 2022, the earliest date of presentation of these condensed consolidated financial statements. This is a retrospective presentation for all equity related disclosures, including issued shares and earnings per share, which have been revised to reflect the effects of the commonly controlled transaction with ASC 250 “Accounting Changes and Errors” as of January 1, 2022. ASC 250 requires that a change in the reporting entity from reorganization entities under common control, be retrospectively applied to the financials statements of all prior periods when the financial statements are issued for a period that includes the date the change in reporting entity of the transaction occurred. The Company completed its public offering on January 23, 2025 with gross proceeds of $10,000,000.

The Company is a truckload services and solutions provider focused on the recycling export supply chain. The Company has become a key player in the New Jersey and Pennsylvania regional trucking market for waste paper, evidenced by the significant market share where the Company accounted for approximately 34% of the waste paper export drayage volumes through New Jersey’s ports and approximately 30% through Philadelphia’s ports, according to data sourced from IHS Markit. In addition to waste paper, the Company’s portfolio also includes the shipment of scrap metal and wooden logs from large waste companies, recycling centers and commodity traders to the ports of Newark, NJ, and Philadelphia, PA. The Company continues to expand our footprints domestically and intend to internationally and have ventured into the recycling export transport market of Tampa and Miami, FL recently.

Basis of Presentation and Principals of Consolidation

The accompanying unaudited condensed unaudited consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America ("GAAP") for interim financial information and with the instructions to the Quarterly Report on Form 10-Q and Article 8 Regulation S-X. Accordingly, they do not include all of the information and notes required by GAAP for annual financial statements. The unaudited condensed consolidated financial statements and notes should be read in conjunction with the consolidated financial statements and notes for the year ended December 31, 2024 and 2023 included in the Company's Annual Report on Form 10-K , as filed with the Securities and Exchange Commission on April 15, 2025. In the opinion of management, all adjustments, consisting of normal accruals, considered necessary for a fair presentation of the interim financial statements have been included. Results for the three months ended March 31, 2025 are not necessarily indicative of the results that may be expected for the year ending December 31, 2025. The unaudited condensed consolidated financial statements include the accounts of the Company and its wholly-owned subsidiary, Toppoint, Inc. All intercompany balances and transactions are eliminated in consolidation.

F-6

NOTE 2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Use of Estimates

The preparation of unaudited condensed consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the unaudited condensed consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. The Company regularly evaluates estimates and assumptions related to the valuation of accounts receivables, valuation of long-lived assets, intangible assets, and accounts payable and accrued expenses. The Company bases its estimates and assumptions on current facts, historical experience and various other factors that it believes to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities and the accrual of costs and expenses that are not readily apparent from other sources. The actual results experienced by the Company may differ materially and adversely from the Company’s estimates. To the extent there are material differences between the estimates and the actual results, future results of operations will be affected.

Property and Equipment

Property and equipment are recorded at cost, less accumulated depreciation. The Company provides for depreciation on a straight-line basis over the estimated useful lives of the assets. Equipment is depreciated over its useful life of five years. Leasehold improvements are amortized over the shorter of the lease term or the estimated useful life of the related assets when they are placed into service. The Company evaluates property and equipment for impairment periodically to determine if changes in circumstances or the occurrence of events suggest the carrying value of the asset or asset group may not be recoverable. Maintenance and repairs are charged to operations as incurred. Expenditures which substantially increase the useful lives of the related assets are capitalized. As of March 31, 2025, and December 31, 2024, the Company’s property and equipment balance consisted of leasehold improvements and equipment.

Intangible Assets

Intangible assets consist of internally developed software in the amount of $806,614 as of March 31, 2025, and December 31, 2024. The software has been placed into service as of December 31, 2024. Accumulated amortization amounted to $134,436 as of March 31, 2025. The software is being developed to utilize AI based technology and synch with custom software designed specifically for the Company’s needs in the export drayage vertical. The software offers a variety of features and benefits that allow AI to scale and automate business operations. The Company evaluated intangible assets for impairment as of March 31, 2025 and December 31, 2024 and determined that there are no impairment losses.

Long-lived Assets

In accordance with ASC 360, “Property, Plant, and Equipment”, the Company tests long-lived assets or asset groups for recoverability when events or changes in circumstances indicate that their carrying amount may not be recoverable. Circumstances which could trigger a review include, but are not limited to: significant decreases in the market price of the asset; significant adverse changes in the business climate or legal factors; accumulation of costs significantly in excess of the amount originally expected for the acquisition or construction of the asset; current period cash flow or operating losses combined with a history of losses or a forecast of continuing losses associated with the use of the asset; and current expectation that the asset will more likely than not be sold or disposed of significantly before the end of its estimated useful life. Recoverability is assessed based on the carrying amount of the asset compared to the estimated future undiscounted cash flows expected to result from the use and the eventual disposal of the asset, as well as specific appraisal in certain instances. An impairment loss equal to the excess of the carrying value over the assets fair market value is recognized when the carrying amount exceeds the undiscounted cash flows.

The impairment loss is recorded as an expense and a direct write-down of the asset. No impairment loss was recorded for the three months ended March 31, 2024 and 2023.

F-7

Deferred Offering Costs

Deferred offering costs represents specific incremental costs incurred by the Company directly attributable to a proposed offering of securities. These amounts have been deferred and will be charged against the gross proceeds of the offering. These offering costs include fees paid to underwriters, attorneys, accountants as well as printers and other third parties directly related to the offering. Costs such as management salaries or other general administrative expenses that are not incremental to the offering are not included in the deferred costs. Deferred offering costs amounted to $398,512 as of December 31, 2024. Such amounts have been charged against the gross proceeds from the offering during the three months ended March 31, 2025.

Revenue Recognition

The Company’s revenue recognition policy is based on the revenue recognition criteria established under the Financial Accounting Standards Board (“FASB”) – Accounting Standards Codification 606 “Revenue From Contracts With Customers” (“ASC 606”), which has established a five-step process to govern contract revenue and satisfy each element is as follows: (1) identify the contract(s) with a customer; (2) identify the performance obligations in the contract; (3) determine the transaction price; (4) allocate the transaction price to the performance obligations in the contract; and (5) recognize revenue when or as you satisfy a performance obligation. The Company records the revenue once all the above steps are completed and services are performed.

The Company’s contracts with customers only include one performance obligation, which is to provide the delivery of truckload services. Revenue is recognized in the gross amount at a point in time when the service is completed and the benefit of our services has been transferred to the customer. This has been determined to be when the goods are delivered to its final destination point. At this point in time, the Company has a present right to payment, and the performance obligation has been met. It is not until delivery is completed, that the Company completed its performance obligation. The customer is not simultaneously receiving and consuming the benefit of the performance until the delivery to its final destination. The Company has determined that during transit, which is typically within twenty four hours, it would be impractical for another entity to complete its performance obligation due to various circumstances which would not lend it to be feasible. Additionally, every performance obligation of the Company is related to a unique order number between the customer and the final destination point. If that specific order cannot be completed, the Company or another provider would need to go through a process change of receiving a new order number due to homeland security and customs restrictions which results in the customer not simultaneously receiving benefits during transit time. The Company is primarily responsible for fulfilling the promise to provide the specified service to its customers. In addition, the Company has discretion in establishing the price for the specified services and bears risk of loss of goods until delivery is completed. Transport time from pick up to the delivery of truckloads is typically within the same day. Revenue is measured as the amount of consideration the Company expects to be entitled to in exchange for those services. Because revenue is recognized at the point in time services are sold to customers, there are no contract liability balances except for when an amount is billed before the service is performed, however there may be contract asset balances for any services provided that were not billed. The Company’s revenue recognition is the same for whether the Company engages independent contractors or its brokerage model for owner operators.

Disaggregation of Revenues

The Company’s revenues are principally derived from providing truckload services focused on the recycling export supply chain. The Company disaggregates their revenue by the type of commodity, as shown below for the three months ended March 31, 2025 and 2024.

	2025		2024
Commodity
Paper	$	2,588,015	$	2,748,819
Import		870,714		612,673
Metal		213,643		211,218
Log		83,448		76,225
Plastic		55,790		84,963
	$	3,811,610	$	3,733,896

F-8

Accounts Receivable and Contract Assets

Accounts receivable represent revenue earned for which the Company has not yet received payment. Accounts receivable are recorded at the invoiced amount and adjusted for amounts management expects to collect from balances outstanding at period-end. The Company adopt the current expected credit loss model (“CECL model”) to estimate the expected credit losses, which is determined by multiplying the probability of default. The Company estimates the allowance for credit loss based on an analysis of specific accounts and an assessment of the customer’s ability to pay, among other factors. At March 31, 2025, and December 31, 2024, the Company recorded an allowance for credit losses accounts in the amount of $123,371. The balance of accounts receivable, net as of March 31, 2025 and December 31, 2024 amounted to $1,165,535 and $1,203,001, respectively.

Contract assets include unbilled amounts from services which have been provided and revenue recognized. Contract asset balances amounted to $390,793 and $88,153 as of March 31 2025, and December 31, 2024, respectively.

Costs of revenues

Costs of revenue includes all directly related costs to deliver our services, which includes independent contractor drivers, insurance, truck maintenance costs, equipment rental and other directly related costs. Such costs are expensed as incurred.

Related Party Transactions

The Company identifies related parties, and accounts for, discloses related party transactions in accordance with ASC 850, “Related Party Disclosures” and other relevant ASC standards.

Parties, which can be a corporation or individual, are related if the Company has the ability, directly or indirectly, to control the other party or exercise significant influence over the other party in making financial and operational decisions. Companies are also considered to be related if they are subject to common control or common significant influence. Transactions between related parties commonly occurring in the normal course of business are related party transactions. Transactions between related parties are also considered to be related party transactions even though they may not be given accounting recognition. While ASC does not provide accounting or measurement guidance for such transactions, it nonetheless requires their disclosure.

Income Taxes

The Company accounts for income taxes utilizing the asset and liability approach. Under this approach, deferred taxes represent the future tax consequences expected to occur when the reported amounts of assets and liabilities are recovered or paid. The provision for income taxes generally represents income taxes paid or payable for the current year plus the change in deferred taxes during the year. Deferred taxes result from the differences between the financial and tax bases of the Company’s assets and liabilities and are adjusted for changes in tax rates and tax laws when changes are enacted.

The calculation of tax liabilities involves dealing with uncertainties in the application of complex tax regulations. The Company recognizes liabilities for anticipated tax audit issues based on the Company’s estimate of whether, and the extent to which, additional taxes will be due. If payment of these amounts ultimately proves to be unnecessary, the reversal of the liabilities would result in tax benefits being recognized in the period when the liabilities are no longer determined to be necessary. If the estimate of tax liabilities proves to be less than the ultimate assessment, a further charge to expense would result.

The Company evaluates uncertain income tax positions taken or expected to be taken in a tax return for recognition in its unaudited condensed consolidated financial statements. The Company was not required to recognize any amounts from uncertain tax positions for the three months ended March 31, 2025 and 2024. The Company’s conclusions regarding uncertain tax positions may be subject to review and adjustment at a later date based upon ongoing analyses of tax laws, regulations and interpretations thereof, as well as other factors. Generally, federal, state and local authorities may examine the Company’s tax returns for three years from the date of filing.

Earnings Per Share

The Company computes net earnings per share in accordance with ASC 260, “Earnings per Share”. ASC 260 requires presentation of both basic and diluted net earnings per share (“EPS”) on the face of the statement of operations. Basic EPS is computed by dividing earnings (loss) available to common shareholders (numerator) by the weighted average number of shares outstanding (denominator) during the period. Diluted EPS gives effect to all dilutive potential common shares outstanding during the period using the treasury stock method and convertible preferred stock using the if-converted method. In computing diluted EPS, the average stock price for the period is used in determining the number of shares assumed to be purchased from the exercise of warrants, options, and restricted stock units. Diluted EPS excludes all dilutive potential shares if their effect is anti-dilutive. The Company had no potentially dilutive securities for the three months ended March 31, 2025 and 2024.

F-9

Recent Accounting Pronouncements

In June 2016, the FASB issued ASU 2016-13, “Financial Instruments - Credit Losses (“Topic 326”)”. The ASU introduces a new accounting model, the Current Expected Credit Losses model (“CECL”), which requires earlier recognition of credit losses and additional disclosures related to credit risk. The CECL model utilizes a lifetime expected credit loss measurement objective for the recognition of credit losses at the time the financial asset is originated or acquired. ASU 2016-13 is effective for annual period beginning after December 15, 2022, including interim reporting periods within those annual reporting periods. The Company has adopted this guidance as of January 1, 2023, and it did not have a material impact on its unaudited condensed consolidated financial statements.

In November 2023, the FASB issued ASU No. 2023-07, “Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures”, which requires enhanced disclosures regarding significant segment expenses and other segment items for public entities on both an annual and interim basis. Specifically, the update required that entities provide, during interim periods, all disclosures related to a reportable segment’s profit or loss and assets that were previously required only on an annual basis. Additionally, this guidance necessitates the disclosure of the title and position of the Chief Operating Decision Maker (“CODM”). The new guidance does not modify how a public entity identifies its operating segments, aggregates them, or applies the quantitative thresholds to determine its reportable segments. This update is effective for fiscal years beginning after December 15, 2023, and interim periods within those fiscal years starting after December 15, 2024. This ASU must be applied retrospectively to all prior periods presented. The Company adopted this ASU during the year ended December 31, 2024, and it did not have a material impact on its unaudited condensed consolidated financial statements.

In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures (ASU 2023-09), which requires disclosure of incremental income tax information within the rate reconciliation and expanded disclosures of income taxes paid, among other disclosure requirements. ASU 2023-09 is effective for fiscal years beginning after December 15, 2024. Early adoption is permitted. The Company’s management does not believe the adoption of ASU 2023-09 will have a material impact on its unaudited condensed consolidated financial statements and disclosures.

NOTE 3: NOTE RECEIVABLE

On January 27, 2025, the Company entered into a loan receivable agreement with Golden Bridge Capital Management Limited (“Golden”), whereas the Company lent Golden $6,000,000 for a temporary debt investment. The loan was to be repaid with a minimum of $1,000,000 principal payments quarterly, with accrued interest at an annual rate of 5%. During March 2025, $300,000 was repaid to the Company. Golden is currently not a credit rated lender.

The Golden loan receivable was amended on April 7, 2025, to amend the payment terms and interest as follows: payments to be made are a minimum of $1,000,000 by January 2026, $2,000,000 by January 2027 and $3,000,000 by January 2028 plus accrued interest at an annual rate of 7%. During the three months ended March 31, 2025, the Company recognized interest income in the amount of $72,333.

NOTE 4: PROPERTY AND EQUIPMENT, NET AND INTANGIBLE ASSETS

Property and equipment consist of the following:

	March 31, 2025 (unaudited)			December 31, 2024			Useful Life
Leasehold improvements	$	150,973		$	150,973		Life of lease (33 months)
Equipment		1,884,102			1,191,528		3-5 years
Less: accumulated depreciation		(247,962	)		(150,929	)
Property and Equipment, net	$	1,787,113		$	1,191,572

Depreciation expense amounted to $97,033 for the three months ended March 31, 2025 and $13,725 for the three months ended March 31, 2024.

Intangible assets consist of the following:

	March 31, 2025 (unaudited)			December 31, 2024
Software development	$	806,614		$	806,614
Less: accumulated amortization		(134,436	)		(67,218	)
Software development, net	$	672,178		$	739,396

Amortization expense amounted to $67,218 for the three months ended March 31, 2025.

F-10

NOTE 5 – LOANS PAYABLE

Loans payable is summarized as follows:

Description	Loan Date	Loan Amount		Interest Rate			Maturity Date	Remaining Principal Balance as of March 31, 2025 (unaudited)		Remaining Principal Balance as of December 31, 2024
Economic Injury Disaster Loan (“EIDL”)	May 2020	$	149,000		3.75	%	May 2050	$	149,900	$	149,900
Less current maturities									-		-
								$	149,900	$	149,900

The EIDL was entered into during May 2020. Interest accrues at 3.75% per annum. Under the original agreement, principal payments were deferred, and the maturity date is May 2050.

Interest expense on loans payable amounted to $2,193 for the three months ended March 31, 2025 and 2024.

At March 31, 2025, combined scheduled maturities of the outstanding debt are as follows:

For the Years Endings:
2025	$	3,147
2026		3,147
2027		3,147
2028		3,147
2029		3,147
Thereafter		134,165
	$	149,900

NOTE 6 – LEASES

The Company leases an office and automobiles under non-cancelable operating and finance lease agreements. The leases have remaining lease terms ranging from three to five years.

Supplemental balance sheet information related to leases is as follows:

Balance Sheet Location			March 31, 2025 (unaudited)			December 31, 2024
Operating Leases
Right-of-use assets, net		$	629,070		$	675,561
Right-of-use assets – related party, net			177,567			82,098

	Lease liability, current maturities		(139,564	)		(130,552	)
	Lease liability, current maturities – related party		(65,699	)		-
			(205,263	)		(130,552	)
	Lease liability, net of current maturities		(293,376	)		(331,833	)
	Lease liability, net of current maturities – related party		(53,517	)		-
Total operating lease liabilities		$	(552,156	)	$	(462,385	)

Weighted Average Remaining Lease Term
Operating leases			2.31 years			2.68 years
Weighted Average Discount Rate
Operating leases			13	%		25	%

The Company calculated the implicit rate on the automobile lease with information contained in the respective leases. Based upon the lease agreements, the Company was able to calculate such amount. As the office lease did not provide an implicit rate, the Company used an incremental borrowing rate based on the information available at the lease commencement date in determining the present value of the lease payments, which is reflective of the specific term of the leases and economic environment of each geographic region.

F-11

The Company’s leased automobile is currently used for promotional services. These leases often contain large material upfront downpayments due to the fact that they are expensive automobiles which are necessary for business development.

The Company’s has entered into two office leases with related parties, which are the chief executive officer and a family member of the chief executive officer.

Anticipated future lease costs, which are based in part on certain assumptions to approximate minimum annual rental commitments under non-cancelable leases, are as follows:

Period Ending March 31,	Operating
2025 (remaining)	$	229,518
2026		306,018
2027		191,014
Total lease payments		726,550
Less: Imputed interest		167,111
Present value of lease liabilities	$	552,156

Total lease expense for leases accounted for under ASC 842 amounted to $107,549 and $100,439 for the three months ended March 31, 2025 and 2024, respectively.

The Company has various other leases which do not fall under the guidance of ASC 842, primarily because there is not an identified asset. Such leases are not included in any amounts noted above.

NOTE 7 – COMMITMENTS AND CONTINGENCIES

Litigation Costs and Contingencies

From time to time, the Company may become involved in various lawsuits and legal proceedings, which arise in the ordinary course of business. Litigation is subject to inherent uncertainties, and an adverse result in these or other matters may arise from time to time that may harm business. Management is currently not aware of any such legal proceedings or claims that could have, individually or in the aggregate, a material adverse effect on our business, financial condition, or operating results besides the litigation listed below.

	(1)	Trend Intermodal Chassis Leasing LLC (“Trend”) filed a lawsuit against Toppoint Inc. in the Superior Court of New Jersey on August 16, 2024, alleging breach of contract under a Master Equipment Lease Agreement and Lease for intermodal chassis and GPS units. Trend claimed that Toppoint failed to make timely rental payments and return the leased equipment, despite repeated demands. Trend sought at least $124,500 in damages, plus interest and attorneys' fees. On April 3, 2025, Trend and Toppoint entered into a Settlement Agreement to resolve the lawsuit. Toppoint agreed to a consent judgment of $222,540 but would only face enforcement if it failed to make scheduled payments totaling $150,000 and return all leased chassis and GPS units by April 11, 2025. Toppoint made an initial $30,000 payment and committed to six monthly payments of $20,000. For any equipment not returned by the deadline, Toppoint would pay $15,000 per chassis and $500 per GPS unit. If Toppoint fulfilled all terms, Trend would file a satisfaction of judgment and refrain from executing on it. As of March 31. 2025, the Company has recorded $150,000 and it has been included in accounts payable and accrued expenses on the accompanying unaudited condensed balance sheet. Subsequent March 31, 2025, the Company made total payments of $50,000 in according to the Settlement Agreement.

	(2)	On January 12, 2024, two drivers, Rainey Mejia Rodriguez and Frank Santana Rodriguez (the “plaintiffs”), filed a class action lawsuit against Toppoint Inc, and certain other parties, in the Superior Court of New Jersey, Essex County, alleging misclassification of truck drivers as independent contractors rather than employees. The plaintiffs seek to represent a class of similarly situated individuals who provided services in New Jersey from January 2018 through the date of the complaint. The complaint asserted violations of the New Jersey Wage Payment Law and the New Jersey Wage and Hour Law, including claims of unlawful wage deductions and failure to pay overtime. The plaintiffs sought compensatory damages, treble and/or liquidated damages, attorneys’ fees, and injunctive relief, without specifying a dollar amount of damages. On July 27, 2024, August 26, 2024, and November 22, 2024, the Court issued multiple orders dismissing the case for lack of prosecution. Upon a motion to reinstate the case filed on January 15, 2025 by the plaintiffs, the Court reinstated the case on January 31, 2025. We believe the claims are without merit and intend to continue to vigorously defend against them. The Company does not believe there is a probable and estimable loss as of March 31, 2025.

F-12

NOTE 8: STOCKHOLDERS’ EQUITY

At March 31, 2025, the Company had 300,000,000 shares of common stock authorized with a par value of $0.0001, and 50,000,000 shares of preferred stock authorized with a par value of $0.0001.

On August 16, 2022, the Company issued 7,500,000 shares of common stock to four investors at a per share purchase price of $0.0001. The four investors were the founders of the Company. On September 29, 2022, the Company issued 7,500,000 shares of common stock at par, in conjunction with the Common Control Transfer. Prior to the Common Control Transfer, the Former Owner, owned 100% of Toppoint, Inc. Additionally, the Company and the current shareholders entered into a Voting Agreement and Irrevocable Proxy (the “Voting Agreement”), whereas each shareholder, unconditionally and irrevocably appoints the Former Owner, as each shareholders proxy to attend and vote at each annual general meeting of the shareholders of the Company and at any other meetings of the shareholders of the Company called, and at every adjournment or postponement thereof, and on every action or approval by written consent or resolution of the shareholders of the Company. Based upon the underlying agreement, the Former Owner, effectively controls the Company.

On January 21, 2025, the Company entered into an Underwriting Agreement (the “Underwriting Agreement”), with A.G.P./Alliance Global Partners (“AGP”), as representative of the underwriters named on Schedule 1 thereto, relating to the Company’s initial public offering of 2,500,000 shares of common stock (the “IPO Shares”). Pursuant to the Underwriting Agreement, in exchange for AGP’s firm commitment to purchase the IPO Shares, the Company agreed to sell the IPO Shares to AGP at a purchase price of $3.72 (93% of the public offering price per share of $4.00, after deducting underwriting discounts and before deducting a 1% non-accountable expense allowance). The Company also agreed to issue AGP warrants (the “Representative’s Warrant”) to purchase 5% of the aggregate number of the IPO Shares, at an exercise price equal to $4.80, equal to 120% of the public offering price, subject to adjustment.

On January 22, 2025, the IPO Shares were listed and commenced trading on the NYSE American.

The closing of the initial public offering took place on January 23, 2025. At the closing, the Company sold the IPO Shares for total gross proceeds of $10,000,000. After deducting the underwriting discounts, non-accountable expense allowance, and other expenses from the gross proceeds, the Company received net proceeds of approximately $8.28 million. The Company also issued AGP the Representative’s Warrant exercisable for the purchase of 125,000 shares of common stock at an exercise price of $4.80 per share, subject to adjustment. The Representative’s Warrant may be exercised by payment of cash or by a cashless exercise provision, and may be exercised at any time for three (3) years following the date of commencement of sales of the initial public offering, in whole or in part.

The offer and sale of the IPO Shares, and the issuance of the Representative’s Warrant, were registered pursuant to the Company’s Registration Statement on Form S-1 (File No. 333-281474), as amended (the “IPO Registration Statement”), initially filed with the SEC on August 12, 2024, and declared effective by the SEC on January 21, 2025, and by means of the final prospectus, dated January 21, 2025, filed with the SEC on January 22, 2025 pursuant to Rule 424(b)(4) of the Securities Act (the “Final IPO Prospectus”).

The IPO Registration Statement included the registration for sale of an additional 375,000 shares of common stock at the public offering price of $4.00 per share upon full exercise of the underwriters’ over-allotment option. The additional shares of common stock underlying the Representative’s Warrant registered for sale by the IPO Registration Statement included 18,750 shares of common stock that the underwriters had the option to purchase upon exercise of the Representative’s Warrant which would be issuable upon full exercise of the underwriters’ over-allotment option. The underwriters’ over-allotment option expired unexercised.

F-13

Equity Incentive Plan

On October 1, 2022, the Company established the 2022 Equity Incentive Plan. The purpose of the Plan is to grant restricted stock, stock options and other forms of incentive compensation to our officers, employees, directors and consultants. The maximum number of shares of common stock that may be issued pursuant to awards granted under the Plan is 2,250,000 shares. Cancelled and forfeited stock options and stock awards may again become available for grant under the Plan. Awards that may be granted include: (a) Incentive Stock Options, (b) Non-qualified Stock Options, (c) Stock Appreciation Rights, (d) Restricted Awards, (e) Performance Share Awards, and (f) Performance Compensation Awards. As of March 31, 2025, all shares remain available for issuance under the Plan.

NOTE 9: CONCENTRATIONS

Concentration of Credit Risk

The Company maintains its cash in bank and financial institution deposits that at times may exceed federally insured limits. The Company has not experienced any losses in such accounts through March 31, 2025. The Company’s bank balances exceeded FDIC insured amounts at times during the periods ending March 31, 2025 and December 31, 2024.

NOTE 10: RELATED PARTY TRANSACTIONS

As disclosed in Note 6, the Company leases office spaces from related parties. Rent expense for these leases amounted to $30,500 and $25,000 for the three months ended March 31, 2025 and 2024, respectively. The Company prepaid $300,000 to the related party for the entire amount of lease payments due during the year ended December 31, 2022 for one office space.

For the three months ended March 31, 2025, the Company paid our Chief Financial Officer $113,254 for settlement of accounts payable. For the three months ended March 31, 2024, the Company paid our Chief Financial Officer $890,346 of which $789,989 was for settlement of accounts payable and $100,357 was for a fee earned.

For the three months ended March 31, 2025 and 2024, the Company paid $150,000 and $623,000, respectively, a related party (family member of the Chief Executive Officer) for various services related to the dispatch of our independent truck drivers. Additionally, during the three months ended March 31, 2025, the Company purchased $650,000 of truck chassis from such related party.

On July 1, 2024, the Company issued Hok C Chan, the Chief Executive Officer, a promissory note for advances he may provide to the Company from time to time, including $600,000 provided on June 21, 2024. The promissory note bears an annual interest rate of 36.88%, increasing to 55% per annum after maturity, and outstanding amounts are due 90 days after the delivery of the respective advance to the Company or the respective direct payment to the Company’s creditor(s). The maturity date for the $600,000 advance was subsequently extended to December 18, 2024. On November 11, 2024, Hok C Chan advanced an additional $500,000 to the Company under the promissory note. This amount is due 90 days after delivery, or February 9, 2025. During the three months ended March 31, 2025, the related party borrowings due to Hok C Chan were extended to June 16, 2025 and August 8, 2025. Additionally, the interest rate has been increased to 55% per annum.

Interest expense on such amount was $100,031 for the three months ended March 31, 2025, and was accrued and included in accounts payable and accrued expenses on the accompanying unaudited condensed consolidated balance sheet.

F-14

NOTE 11: INCOME TAXES

The Company’s provision for income taxes consists of the following for the three months ended March 31, 2025 and 2024:

	2025			2024
Current:
Federal	$	171,949		$	9,989
State and local		-			3,378
Total current		171,949			13,367

Deferred:
Federal	$	(52,926	)	$	16,492
State and local		(25,363	)		5,577
Total deferred		(78,289	)		22,069

Income tax provision	$	93,660		$	35,436

A reconciliation of the federal statutory rate of 21% for the three months ended March 31, 2025 and 2024 to the effective rate for income from operations before income taxes is as follows:

	2025			2024
Benefit for income taxes at federal statutory rate		21.00	%		21.00	%
State and local income taxes, net of federal benefit		6.71			7.10
Meals and entertainment		(0.41	)		1.06
Fines and penalties		-			0.14
Other and prior-year true up		(27.3	)		(5.12	)
Effective income tax rate		-	%		24.18	%

The tax effects of these temporary differences along with the net operating losses, net of an allowance for credits, have been recognized as deferred tax assets (liabilities) at March 31, 2025 (unaudited) and December 31, 2024 as follows:

	2025			2024
Net operating loss	$	341,478		$	211,248
Accounts and contracts receivable		(469,880	)		(391,924	)
Accounts payable and accrued expenses		122,623			108,076
Depreciation		(32,696	)		(32,696	)
Lease liability		(70,344	)		(81,812	)
Net deferred tax liability	$	(108,819	)	$	(187,108	)

As of March 31, 2025, the Company had a net operating loss carryforward of approximately $1,200,000 for Federal and State tax purposes. The net operating loss will carryforward indefinitely and be available to offset up to 80% of future taxable income each year.

The Company recognized a provision for income taxes in the amount of $93,600 and $35,436 for the three months ended March 31, 2025 and 2024, respectively. The Company’s current portion of its provision for income taxes during the three months ended March 31, 2025 resulted from a payment for income taxes due with its prior year return.

F-15

NOTE 12: SEGMENT INFORMATION

The Company operates as one operating segment where it derives its revenues from the delivery of truckload services. To assess performance the chief operating decision maker (“CODM”), who is the Chief Executive Officer, evaluates the operating results and performance through net income. Our CODM regularly reviews net income as reported on the statement of operations for purposes of evaluating performance, allocating resources, setting incentive compensation targets, and planning and forecasting future periods. In addition to net income overall, the CODM also regularly reviews additional significant expense categories, which comprise costs of revenue within the Company’s consolidated statements of operations. All other financial statement metrics are reviewed and/or considered on a consolidated basis:

	For The Three Months Ended March 31, 2025			For The Three Months Ended March 31, 2024

Revenues	$	3,811,610		$	3,733,896

Costs and expenses
Independent contractor drivers		2,399,764			2,266,003
Insurance		393,811			17,562
Truck maintenance costs		69,115			42,104
Equipment rental		107,868			83,815
Other costs of revenues		343,009			845,462
Total costs of revenue		3,313,567			3,254,946
General and administrative expenses		905,160			331,055
Total costs and expenses		4,218,727			3,586,001

(Loss) income from operations		(407,117	)		147,895

Other income (expense)
Interest expense		(100,031	)		(1,369	)
Interest income		72,333			-
Total other income (expense), net		(27,698	)		(1,369	)

(Loss) income before income taxes		(434,815	)		146,526

Provision for income taxes:		93,660			35,436

Net (loss) income	$	(528,475	)	$	111,090

NOTE 13: EARNINGS PER SHARE

Basic EPS is computed by dividing earnings available to common shareholders (numerator) by the weighted average number of shares outstanding (denominator) during the period. Diluted EPS gives effect to all dilutive potential common shares outstanding during the period using the treasury stock method and convertible preferred stock using the if-converted method. In computing diluted EPS, the average stock price for the period is used in determining the number of shares assumed to be purchased from the exercise of warrants, options, and restricted stock units. Diluted EPS excludes all dilutive potential shares if their effect is anti-dilutive. The Company had no potentially dilutive securities for the three months ended March 31, 2025 and 2024.

NOTE 14: SUBSEQUENT EVENTS

The Company evaluated subsequent events through May 15, 2025 to ensure that this filing includes appropriate disclosures of events both recognized in the condensed consolidated financial statements as of March 31, 2025, and events which occurred subsequent to March 31, 2025 but were not recognized in the consolidated financial statements. The Company has determined that there were no subsequent events which required recognition, adjustment to or disclosure in the consolidated financial statements, except the events described below.

On May 8, 2025, the Company entered into a term loan with M&T Bank in the amount of $328,500. The loan bears interest at a rate of 6.09% and has monthly payments of principal and interest. The maturity date is May 2030 and is collateralized by the Company’s equipment.

F-16

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.

The following management’s discussion and analysis of financial condition and results of operations provides information that management believes is relevant to an assessment and understanding of our plans and financial condition. The following financial information is derived from our financial statements and should be read in conjunction with such financial statements and notes thereto set forth elsewhere herein.

Use of Terms

Except as otherwise indicated by the context and for the purposes of this report only, references in this report to “we,” “us,” “our,” the “Company,” “Toppoint Holdings,” and “our company” refer to the consolidated operations of Toppoint Holdings Inc., a Nevada corporation. “Common stock” refers to the Company’s common stock, par value $0.0001 per share.

Note Regarding Forward-Looking Statements

This report contains forward-looking statements that are based on our management’s beliefs and assumptions and on information currently available to us. All statements other than statements of historical facts are forward-looking statements. These statements relate to future events or to our future financial performance and involve known and unknown risks, uncertainties and other factors that may cause our actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by these forward-looking statements. Forward-looking statements include, but are not limited to, statements about:

●

our goals and strategies;

●

our future business development, financial condition and results of operations;

●

expected changes in our revenue, costs or expenditures;

●

growth of and competition trends in our industry;

●

our expectations regarding demand for, and market acceptance of, our services;

●

our expectations regarding our relationships with investors and other parties with whom we collaborate;

●

fluctuations in general economic and business conditions in the markets in which we operate; and

●

relevant government policies and regulations relating to our industry.

In some cases, you can identify forward-looking statements by terms such as “may,” “could,” “will,” “should,” “would,” “expect,” “plan,” “intend,” “anticipate,” “believe,” “estimate,” “predict,” “potential,” “project” or “continue” or the negative of these terms or other comparable terminology. These statements are only predictions. You should not place undue reliance on forward-looking statements because they involve known and unknown risks, uncertainties and other factors, which are, in some cases, beyond our control and which could materially affect results. Factors that may cause actual results to differ materially from current expectations include, among other things, those listed under Item 1A. “Risk Factors” of our most recent annual report on Form 10-K. If one or more of these risks or uncertainties occur, or if our underlying assumptions prove to be incorrect, actual events or results may vary significantly from those implied or projected by the forward-looking statements. No forward-looking statement is a guarantee of future performance.

In addition, statements that “we believe” and similar statements reflect our beliefs and opinions on the relevant subject. These statements are based upon information available to us as of the date of this report, and while we believe such information forms a reasonable basis for such statements, such information may be limited or incomplete, and our statements should not be read to indicate that we have conducted an exhaustive inquiry into, or review of, all potentially available relevant information. These statements are inherently uncertain and investors are cautioned not to unduly rely upon these statements.

The forward-looking statements made in this report relate only to events or information as of the date on which the statements are made in this report. Except as expressly required by the federal securities laws, there is no undertaking to publicly update or revise any forward-looking statements, whether as a result of new information, future events, changed circumstances or any other reason.

Overview

We are a truckload services and solutions provider focused on the recycling export supply chain. We have become a key player in the New Jersey and Pennsylvania regional trucking market for waste paper, evidenced by our significant market share where we accounted for approximately 34% of the waste paper export drayage volumes through New Jersey’s ports and approximately 30% through Philadelphia’s ports, according to data sourced from IHS Markit. In addition to waste paper, our portfolio also includes the shipment of scrap metal and wooden logs from large waste companies, recycling centers and commodity traders to the ports of Newark, NJ, and Philadelphia, PA. We have expanded our footprints domestically and internationally, venturing into the recycling export transport markets of Tampa, Jacksonville and Miami, FL, and Baltimore, MD in 2023, and Ensenada, Mexico in 2024. We intend to explore the international markets in Canada, the United Kingdom and Australia in the near future.

Our client base includes largest Fortune 500 waste companies and over 280 recycling centers and commodity traders that operate in nearly 2,300 locations. Our growing client base relies on us as their partner to provide a “white glove service” to ensure their time-sensitive, ultra-high throughput commodities are safely loaded and delivered right to container ships. In addition, capitalizing on our know-how in developing logistics solutions over the years, we are able to propose integrated transportation solutions that cover loading, transport, port drayage and unloading.

On January 23, 2025, we closed our initial public offering of 2,500,000 shares of common stock, at an offering price of $4.00 per share, for gross proceeds of $10,000,000. Our common stock began trading on NYSE American on January 22, 2025, under the symbol “TOPP.”

Recent Developments

We have expanded our operations by securing additional clients, introducing new service offerings, growing partnerships with existing clients and entering new geographic markets since early 2025:

●

Import Drayage Expansion: Secured a new partnership with a New Jersey freight broker, managing 200+ monthly import loads with potential fourfold growth, improving operational efficiency, which is expected to generate over $1 million in additional revenue in 2025.

●

Latin America Market Expansion: Expanded operations in Ensenada, Mexico, through a new trucking partnership, enhancing non-ferrous metal exports and strengthening global trade connections.

●

Refrigerated Logistics Growth: Launched cold-chain logistics services, managing refrigerated containers at major ports to diversify service offerings, stabilize revenue, and capitalize on a high-growth market.

●

Recycling & Waste Management Expansion: Secured a new partnership with Casella Waste Systems (“Casella”), an industry leader in resource renewal and sustainability, to support Casella’s Springfield, Massachusetts facility; and increased service capacity with existing client Waste Management, adding 1,000 new loads and up to $2 million in additional annual revenue in 2025.

●

Vietnam Freight Operations: Expanded import logistics through a new partnership with a premier Vietnamese freight company, which will optimize fleet utilization and is expected to drive 30% year-over-year revenue growth in 2025.

Emerging Growth Company Status and Smaller Reporting Company Status

We are an emerging growth company, as defined in the JOBS Act. The JOBS Act permits an emerging growth company such as us to take advantage of an extended transition period to comply with new or revised accounting standards. We have elected to avail ourselves of such extended transition period, which means that when a standard is issued or revised and it has different application dates for public or private companies, we can adopt the new or revised standard at the time private companies adopt the new or revised standard and may do so until such time that we either (i) irrevocably elect to opt out of such extended transition period or (ii) no longer qualify as an emerging growth company. We may choose to early adopt any new or revised accounting standards whenever such early adoption is permitted for private companies. We will continue to remain an emerging growth company until the earliest of the following: (1) the last day of the fiscal year following the fifth anniversary of the date of the completion of our initial public offering; (2) the last day of the fiscal year in which our total annual gross revenue is equal to or more than $1.235 billion; (3) the date on which we have issued more than $1.0 billion in nonconvertible debt during the previous three years; or (4) the date on which we are deemed to be a large accelerated filer under the rules of the SEC.

We are also a smaller reporting company as defined in the Exchange Act. We may continue to be a smaller reporting company even after we are no longer an emerging growth company. We may take advantage of certain of the scaled disclosures available to smaller reporting companies and will be able to take advantage of these scaled disclosures for so long as our voting and non-voting common stock held by non-affiliates is less than $250.0 million measured on the last business day of our second fiscal quarter, or our annual revenue is less than $100.0 million during the most recently completed fiscal year and our voting and non-voting common stock held by non-affiliates is less than $700.0 million measured on the last business day of our second fiscal quarter.

Principal Factors Affecting Our Financial Performance

Our operating results are primarily affected by the following factors:

●

our ability to acquire new customers or retain existing customers;

●

our ability to offer competitive product pricing;

●

our ability to broaden product offerings;

●

industry demand and competition;

●

our ability to leverage technology and use and develop efficient processes;

●

our ability to attract and retain talented employees; and

●

market conditions and our market position.

Results of Operations

Comparison of Three Months Ended March 31, 2025 and 2024

The following table sets forth key components of our results of operations during the three months ended March 31, 2025 and 2024, together with the corresponding period-over-period changes.

	Three Months Ended March 31:						Increase (Decrease)
	2025			2024			$			%
Revenues	$	3,811,610			3,733,896			77,714			2	%

Costs and expenses
Costs of revenues		3,313,567			3,254,946			58,621			2	%
General and administrative		905,160			331,055			574,105			173	%
		4,218,727			3,586,001			632,726			18	%
(Loss) income from operations		(407,117	)		147,895			(555,012	)		(375	)%
Other expense		(27,698	)		(1,369	)		(26,329	)		1,923	%
Net (loss) income before income taxes		(434,815	)		146,526			(581,341	)		(397	)%
Provision for (benefit from) income taxes		93,660			35,436			58,224			164	%
Net (loss) income	$	(528,475	)		111,090			(639,565	)		(576	)%

Revenue

Revenue for the three months ended March 31, 2025 and 2024 was $3,811,610 and $3,733,896, respectively, representing an increase of $77,714 or 2%. The revenue increase in 2025 was mainly due to an increase in our import and less volatility in the scrap paper exports. We received an increased number of orders in both scrap paper and imports, as well as increased revenue per load in imports and logs.

Our revenues consisted of the following during the three months ended March 31, 2025, and 2024:

	2025		2024
Commodity
Paper	$	2,588,015	$	2,748,819
Import		870,714		612,673
Metal		213,643		211,218
Log		83,448		76,225
Plastic		55,790		84,963
	$	3,811,610	$	3,733,896

After a surge followed by a months-long decline in old corrugated container (“OCC”) prices in 2024, analysts anticipate market conditions to begin stabilizing in 2025. In late 2024, exports drove increased demand for recycled waste paper on both the U.S. East and West Coasts. While China’s demand for U.S. recycled waste paper continued to decline due to its import restrictions, the broader Asia-Pacific region maintained strong demand to support the growing e-commerce packaging needs in the region. Countries in the region are increasingly investing in modern, high-efficiency mills that improve usage of recycled waste paper. Despite improvements in domestic recycling coverage, these countries still depend on imported recycled waste paper for production. As U.S. domestic supply stabilizes and export demand becomes more balanced, market volatility has shown signs of easing in early 2025. Our revenue in the waste paper vertical decreased slightly by $160,804, or 5.8%, to $2,588,015 for the quarter ended March 31, 2025, from $2,748,819 for the quarter ended March 31, 2024.

Despite the recent downturn in the recycled waste paper market, our direct relationships with overseas manufacturers and large importers have provided significant growth opportunities. Additionally, the Port of New York and New Jersey had seen a notable year-over-year increase in import container volume in the first quarter of 2025. Our further expansion into the import vertical resulted in an increase of 37.3% in loads, or an additional 316 loads, compared to the first quarter of 2024. Our revenue in the imports vertical increased significantly by $258,041, or 42.1%, to $870,714 for the quarter ended March 31, 2025, from $612,673 for the quarter ended March 31, 2024.

Scrap metal exports also experienced consistent demand with slight growth quarter over quarter. Our revenue in the metal vertical increased slightly by $2,425, or 1.1%, to $213,643 for the quarter ended March 31, 2025, from $211,218 for the quarter ended March 31, 2024.

The logging and forestry exports revenue rose slightly by 9.5%, or $7,223, to $83,448 for the first quarter of 2025, as compared to $76,225 for the first quarter of 2024, but load count remained down by 8.1%. A decrease from prior year highs is expected as logging for export in the areas we service has decreased year over year.

Plastic revenues had dropped by 34.3%, or $29,173, to $55,790 for the quarter ended March 31, 2025, from $84,963 for the quarter ended March 31, 2024, due to US import demand on plastic increasing to record highs while US plastic export continued to decrease in 2025.

Cost and expenses

Costs of revenues Our cost of revenue includes all directly related costs to deliver our services, which includes independent contractor drivers, insurance, truck maintenance costs, equipment rental and other directly related costs. Our costs of revenue for the three months ended March 31, 2025 and 2024 was $3,313,567 and $3,254,946, respectively, representing an increase of 2%. Such increase was in line with our increased revenue.

Gross profit As a result of the foregoing, our gross profit increased by $19,093 to $498,043 for the three months ended March 31, 2025 from $478,950 for the three months ended March 31, 2024. As a percentage of revenue, gross profit remained consistent from 13% for the three months ended March 31, 2025, as compared to 13% for the three months ended March 31, 2024.

General and administrative Our general and administrative expenses consist primarily of automobile, office, insurance, payroll and rent expenses. Our general and administrative expenses increased by $574,105 or 173% to $905,160 for the three months ended March 31, 2025 from $331,055 for the three months ended March 31, 2024. This change primarily results from an increase in professional fees from going public, travel expenses related due to business development and depreciation expense.

Income tax expense We recorded a provision for income taxes of $93,660 for the three months ended March 31, 2025, as compared to $35,436 for the three months ended March 31, 2024, an increase of $58,224 or 164%. The increase in the income tax expense mainly resulted from a payment due on our prior year tax returns.

Net (loss) income

Net (loss) income for the three months ended March 31, 2025 and 2024 was $(528,475) and $111,090, respectively. The change of net income was due to the increase in general and administrative expenses.

Other Performance Indicator

We use Number of Loads Completed, or NLC, as a key performance indicator to help us evaluate our business, identify trends affecting our business, formulate business plans, and make strategic decisions. This measure may be used by other companies in our industry who may calculate it differently than we do, limiting its usefulness as a comparative measure. Therefore, NLC may have limitations as an analytical tool.

We define NLC as the total number of loads delivered during a period. As our fleet exclusively offers full truckload shipping, tracking NLC is straightforward. We recognize a completed load when our dispatch team receives the receipt paperwork from the driver at the port or other destination. We simultaneously notify the client of the delivery. We use our proprietary analytics system to record NLC. As we ship both 40-foot and 20-foot shipping containers, the total tonnage transported represents the sum of the weight of the loads included in NLC for the period presented, based on an average weight of 28 tons per load. The average weight of 28 tons per load is an estimate made by the management based on historical data.

The NLC information, including the related estimated total tonnage, has been prepared by, and is the responsibility of, the Company’s management. Such information has not been audited, reviewed, examined, compiled or applied agreed-upon procedures by our auditor.

The table below shows both the total NLCs and a breakdown of NLCs by commodity type during the three months ended March 31, 2025 and 2024. Our revenue generation directly corresponds to NLC but is also impacted by the rates charged to customers.

	Three months ended March 31, 2025					Three months ended March 31, 2024
	Number of Loads Completed		Percentage in Total NLC			Number of Loads Completed		Percentage in Total NLC
Waste Paper		3,929		71.7	%		4,094		73.5	%
Waste Metal		244		4.5	%		226		5.7	%
Forestry		68		1.2	%		74		1.4	%
Import		1,164		21.2	%		848		15.8	%
Plastic		77		1.4	%		118		2.2	%
Total		5,482		100	%		5,360		100	%

For the three months ended March 31, 2025, the NLC for Waste Paper declined by 165, or 4.0%, to 3,929, from 4,094 for the three months ended March 31, 2024. The decrease was primarily attributed to an industry-wide decrease in scrap paper export volume.

For the three months ended March 31, 2025, the NLC for Waste Metal increased by 18 or 8.0%, to 244, from 226 for the three months ended March 31, 2024. The increase was due to consistent orders from metal clients acquired in 2024 in the waste metal space.

For the three months ended March 31, 2025, the NLC for Forestry decreased by 6, or 8.1%, to 68, from 74 for the three months ended March 31, 2024. The decrease primarily reflected limitations on the volume of trees deforested for logging in the New York state we service.

For the three months ended March 31, 2025, the NLC for Import increased by 316, or 37.3%, to 1,164, from 848 for the three months ended March 31, 2024. The increase was due to an increase of consistent work from new import customers.

For the three months ended March 31, 2025, the NLC for Plastic decreased by 41, or 34.8%, to 77, from 118 for the three months ended March 31, 2024. The decrease was due to industry-wide decreases in exports for plastics.

For the three months ended March 31, 2025, the total NLC increased by 122, or 2.3%, to 5,482, from 5,360 for the three months ended March 31, 2024. The increase in total NLC was primarily due to significant increase in the NLCs for Import.

Liquidity and Capital Resources

As of March 31, 2025 and December 31, 2024, we had cash of $1,739,834 and $557,619, respectively. To date, we have financed our operations primarily through revenue generated from operations as well as our proceeds received from our IPO in January 2025.

During the three months ended March 31, 2025, we had a net loss of $528,475 and net cash used in operations of $884,444, which resulted primarily from an increase in professional fees resulting from our IPO, as well as increased income tax expense from prior years liabilities. We believe that our current levels of cash will be sufficient to meet our anticipated cash needs for our operations for at least the next 12 months, including our anticipated costs associated with becoming a public reporting company. We may, however, in the future require additional cash resources due to changing business conditions, implementation of our strategy to expand our business, or other investments or acquisitions we may decide to pursue. If our own financial resources are insufficient to satisfy our capital requirements, we may seek to sell additional equity or debt securities or obtain additional loans. The sale of additional equity securities could result in dilution to our shareholders. The incurrence of indebtedness would result in increased debt service obligations and could require us to agree to operating and financial covenants that would restrict our operations. Financing may not be available in amounts or on terms acceptable to us, if at all. Any failure by us to raise additional funds on terms favorable to us, or at all, could limit our ability to expand our business operations and could harm our overall business prospects.

Summary of Cash Flow

The following table provides detailed information about our net cash flow for the fiscal years ended March 31, 2025 and 2024:

	Three Months Ended
	March 31, 2025			March 31, 2024
Net cash used in operating activities	$	(884,443	)	$	15,689
Net cash used in investing activities		(6,392,574	)		(22,918	)
Net cash provided by (used in) financing activities		8,459,232			(211,276	)
Net increase (decrease) in cash		1,182,215			(218,505	)
Cash at beginning of period		557,619			1,455,976
Cash at end of period	$	1,738,834		$	1,237,471

Operating activities used net cash of $884,443 during the three months ended March 31, 2025, and provided $15,689 during the three months ended March 31, 2024. Cash provided by operating activities decreased by approximately $900,133 primarily due to a decrease in net income of $639,565, increase in amortization of ROU of $12,757, increase in depreciation of $83,308, increase in amortization of $45,149, deferred taxes of $78,289, and an overall decrease of $323,493 from the change in operating assets and liabilities, for the three months ended March 31, 2025 in comparison of the three months ended March 31, 2024.

Investing activities used net cash of $6,392,574 during the three months ended March 31, 2025, and $22,918 during the three months ended March 31, 2024. Cash used in investing activities increased by $6,369,656 from the corresponding period of the prior year. The March 31, 2025, amount is due to $692,574 from the purchases of property and equipment and $5,700,000 from the issuance of notes receivable. The March 31, 2024 amount is due to $22,918 from advances to stockholder.

Financing activities provided net cash of $8,459,232 during the three months ended March 31, 2025, and used $211,176 during the three months ended March 31, 2024. Cash used in financing activities increased by $8,670,506. The March 31, 2025, amount is due to $8,459,232 received from the issuance of common stock. The March 31, 2024 amount is due to $211,176 paid for deferred offering costs.

Material Cash Requirements from Known Contractual and Other Obligations

The following table summarizes our contractual obligations as of March 31, 2025 and as for the 12 months thereafter:

Contractual Obligations	As of March 31, 2025		For the year ended March 31, 2026
Operating lease obligations	$	552,156	$	205,263

Total Contractual Obligations	$	552,156	$	205,263

We intend to fund our contractual obligations with working capital.

Initial Public Offering and Underwriting Agreement

On January 21, 2025, we entered into an Underwriting Agreement (the “Underwriting Agreement”), with A.G.P./Alliance Global Partners (“AGP”), as representative of the underwriters named on Schedule 1 thereto, relating to the Company’s initial public offering of 2,500,000 shares of common stock (the “IPO Shares”). Pursuant to the Underwriting Agreement, in exchange for AGP’s firm commitment to purchase the IPO Shares, the Company agreed to sell the IPO Shares to AGP at a purchase price of $3.72 (93% of the public offering price per share of $4.00, after deducting underwriting discounts and before deducting a 1% non-accountable expense allowance). The Company also agreed to issue AGP warrants (the “Representative’s Warrant”) to purchase 5% of the aggregate number of the IPO Shares, at an exercise price equal to $4.80, equal to 120% of the public offering price, subject to adjustment.

On January 22, 2025, the IPO Shares were listed and commenced trading on the NYSE American.

Off-Balance Sheet Arrangements

We have no off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources.

Critical Accounting Policies and Estimates

The following discussion relates to critical accounting policies for our company. The preparation of financial statements in conformity with GAAP requires our management to make assumptions, estimates and judgments that affect the amounts reported, including the notes thereto, and related disclosures of commitments and contingencies, if any. We have identified certain accounting policies that are significant to the preparation of our financial statements. These accounting policies are important for an understanding of our financial condition and results of operations. Critical accounting policies are those that are most important to the portrayal of our financial condition and results of operations and require management’s difficult, subjective, or complex judgment, often as a result of the need to make estimates about the effect of matters that are inherently uncertain and may change in subsequent periods. Certain accounting estimates are particularly sensitive because of their significance to financial statements and because of the possibility that future events affecting the estimate may differ significantly from management’s current judgments. We believe the following critical accounting policies involve the most significant estimates and judgments used in the preparation of our financial statements:

Revenue Recognition

The Company’s revenue recognition policy is based on the revenue recognition criteria established under the Financial Accounting Standards Board (“FASB”) – Accounting Standards Codification 606 ”Revenue From Contracts With Customers” (“ASC 606”), which has established a five-step process to govern contract revenue and satisfy each element is as follows: (1) identify the contract(s) with a customer; (2) identify the performance obligations in the contract; (3) determine the transaction price; (4) allocate the transaction price to the performance obligations in the contract; and (5) recognize revenue when or as you satisfy a performance obligation. The Company records the revenue once all the above steps are completed and services are performed.

The Company’s contracts with customers only include one performance obligation, which is to provide the delivery of truckload services. Revenue is recognized in the gross amount at a point in time when the service is completed and the benefit of our services has been transferred to the customer. This has been determined to be when the goods are delivered to its final destination point. At this point in time, the Company has a present right to payment, and the performance obligation has been met. It is not until delivery is completed that the Company completed its performance obligation. The customer is not simultaneously receiving and consuming the benefit of the performance until the delivery to its final destination. The Company has determined that during transit, which is typically within twenty four hours, it would be impractical for another entity to complete its performance obligation due to various circumstances which would not lend it to be feasible. Additionally, every performance obligation of the Company is related to a unique order number between the customer and the final destination point. If that specific order cannot be completed, the Company or another provider would need to go through a process change of receiving a new order number due to homeland security and customs restrictions which results in the customer not simultaneously receiving benefits during transit time. The Company is primarily responsible for fulfilling the promise to provide the specified service to its customers. In addition, the Company has discretion in establishing the price for the specified services and bears risk of loss of goods until delivery is completed. Transport time from pick up to the delivery of truckloads is typically within the same day. Revenue is measured as the amount of consideration the Company expects to be entitled to in exchange for those services. Because revenue is recognized at the point in time services are sold to customers, there are no contract liability balances except for when an amount is billed before the service is performed, however there may be contract asset balances for any services provided that were not billed. The Company’s revenue recognition is the same for whether the Company engages independent contractors or its brokerage model for owner operators.

Accounts Receivable , Net

Income Taxes

Historically and through December 31, 2021, the Company elected, by consent of its stockholders, to be taxed under the provisions of Subchapter S of the Internal Revenue Code and applicable state statutes. The Company made a qualified Subchapter S subsidiary election with the Internal Revenue Service and accordingly the Company’s income is to be included in the Parent’s income tax return for Federal tax purposes. The Company has also elected S Corporation status for Pennsylvania State tax purposes. The Company revoked its Subchapter S election with the Internal Revenue Service and Pennsylvania as of January 1, 2022.

As of January 1, 2022, the Company accounts for income taxes utilizing the asset and liability approach. Under this approach, deferred taxes represent the future tax consequences expected to occur when the reported amounts of assets and liabilities are recovered or paid. The provision for income taxes generally represents income taxes paid or payable for the current year plus the change in deferred taxes during the year. Deferred taxes result from the differences between the financial and tax bases of the Company’s assets and liabilities and are adjusted for changes in tax rates and tax laws when changes are enacted.

The Company evaluates uncertain income tax positions taken or expected to be taken in a tax return for recognition in its consolidated financial statements. The Company was not required to recognize any amounts from uncertain tax positions for the three months ended March 31, 2025 and 2024. The Company’s conclusions regarding uncertain tax positions may be subject to review and adjustment at a later date based upon ongoing analyses of tax laws, regulations and interpretations thereof, as well as other factors. Generally, federal, state and local authorities may examine the Company’s tax returns for three years from the date of filing.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

Not applicable.

ITEM 4. CONTROLS AND PROCEDURES.

Evaluation of Disclosure Controls and Procedures

As required by Rule 13a-15 under the Exchange Act, our management has carried out an evaluation, with the participation and under the supervision of our Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures as of March 31, 2025. Disclosure controls and procedures refer to controls and other procedures designed to ensure that information required to be disclosed in the reports we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the rules and forms of the SEC and that such information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure. In designing and evaluating our disclosure controls and procedures, management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives, and management is required to apply its judgment in evaluating and implementing possible controls and procedures.

Management conducted its evaluation of disclosure controls and procedures under the supervision of our Chief Executive Officer and our Chief Financial Officer. Based upon, and as of the date of this evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were not effective as of March 31, 2025.

As we disclosed in our Annual Report on Form 10-K filed with the SEC on April 15, 2025, management identified significant deficiencies in our internal control over financial reporting. The significant deficiencies that have been identified relate to our lack of robust and formal financial reporting policies and procedures in place to address SEC disclosure requirements.

We have engaged external financial consultant with U.S. GAAP experience to help our management in financial reporting processes and are in the process of developing and implementing a comprehensive set of processes and internal controls to timely and appropriately (i) identify transactions that may be subject to complex U.S. GAAP accounting treatment, (ii) analyze the transactions in accordance with the relevant U.S. GAAP, and (iii) review the accounting technical analysis.

Designing and implementing effective disclosure controls and procedures are a continuous effort that requires us to anticipate and react to changes in our business and the economic and regulatory environments and to devote significant resources to maintaining a financial reporting system that adequately satisfies our reporting obligations. The remedial measures that we have taken and intend to take may not fully address the significant deficiencies that we have identified.

Changes in Internal Control Over Financial Reporting

Except for the matters described above, there were no changes in our internal controls over financial reporting during the quarter ended March 31, 2025 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART II

OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS.

From time to time, we become involved in various lawsuits and legal proceedings which arise in the ordinary course of business. However, litigation is subject to inherent uncertainties, and an adverse result in these or other matters may arise from time to time that may harm our business. We are not currently aware of any such legal proceedings or claims that we believe will have a material adverse effect on our business, financial condition or operating results.

ITEM 1A. RISK FACTORS.

Not applicable.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.

Unregistered Sales of Equity Securities

Other than as previously disclosed in current reports on Form 8-K, there were no unregistered sales of equity securities during the period covered by this report.

Purchases of Equity Securities

No repurchases of our common stock were made during the three months ended March 31, 2025.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES.

None.

ITEM 4. MINE SAFETY DISCLOSURES.

Not applicable.

ITEM 5. OTHER INFORMATION.

Securities Trading Plans of Directors and Executive Officers

None of our directors or “officers,” as defined in Rule 16a-1(f) under the Exchange Act, adopted or terminated a Rule 10b5-1 trading plan or arrangement or a non-Rule 10b5-1 trading plan or arrangement, as defined in Item 408 of Regulation S-K, during the fiscal quarter ended March 31, 2025.

ITEM 6. EXHIBITS.

The following exhibits are filed as part of this report or incorporated by reference:

Exhibit No.		Description
31.1*		Certifications of Principal Executive Officer filed pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.2*		Certifications of Principal Financial and Accounting Officer filed pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32.1**		Certifications of Principal Executive Officer furnished pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
32.2**		Certifications of Principal Financial and Accounting Officer furnished pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
101.INS*		Inline XBRL Instance Document
101.SCH*		Inline XBRL Taxonomy Extension Schema Document
101.CAL*		Inline XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF*		Inline XBRL Taxonomy Extension Definition Linkbase Document
101.LAB*		Inline XBRL Taxonomy Extension Label Linkbase Document
101.PRE*		Inline XBRL Taxonomy Extension Presentation Linkbase Document
104*		Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)

*	Filed herewith
**	Furnished herewith

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

Date: May 15, 2025	Toppoint Holdings Inc.

	/s/ Hok C Chan
	Name:	Hok C Chan
	Title:	Chief Executive Officer
		(Principal Executive Officer)

	/s/ John Feliciano III
	Name:	John Feliciano III
	Title:	Chief Financial Officer
		(Principal Financial and Accounting Officer)

SEC Form 10-Q filed by Toppoint Holdings Inc.