EVOA EVO Transportation and Energy Services Inc (CE)

Notes to Consolidated Financial Statements

Note 1 - Description of Business and Summary of Significant Accounting Policies

Thunder Ridge Transport, Inc. (the “Company”) and its subsidiaries provide transportation services throughout the Midwest including operations in Missouri, Kansas, Iowa, Tennessee, New York, Pennsylvania, and Texas. The Company was founded in 2000, and its primary business is interstate highway contract routes operated for the United States Postal Service (“USPS”).

The Company competitively bids on transportation contracts that detail the movement of mail between processing facilities and to destination post offices. Customer contracts are long term in nature with four-year terms and often are renewed to the incumbent if appropriate service has been performed. Contracts are bid and performed in accordance with all contract requirements including but not limited to Service Contract Act requirements, Department of Transportation regulations (federal and state), and all other applicable local and state regulations.

Principles of Consolidation

The accompanying consolidated financial statements include the accounts of Thunder Ridge Transport, Inc. and its subsidiary, Thunder Ridge Logistics, LLC. All intercompany accounts and transactions have been eliminated in consolidation, and there was no activity for Thunder Ridge Logistics, LLC for the years ending December 31, 2017 and 2016.

Use of Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

The consolidated financial statements include some amounts that are based on management’s best estimates and judgments. The most significant estimates relate to allowance for uncollectible accounts receivable, depreciation, contingencies, and going concern. These estimates may be adjusted as more current information becomes available, and any adjustment could be significant.

Cash

The Company considers all highly liquid instruments purchased with an original maturity of three months or less to be cash. The Company continually monitors its positions with, and the credit quality of, the financial institutions with which it invests. As of the balance sheet date, and periodically throughout the year, the Company has maintained balances in various operating accounts in excess of federally insured limits.

THUNDER RIDGE TRANSPORT, INC.

Notes to Consolidated Financial Statements

Note 1 - Description of Business and Summary of Significant Accounting Policies (continued)

Accounts Receivable

The Company provides an allowance for doubtful accounts equal to the estimated uncollectible amounts. The Company’s estimate is based on historical collection experience and a review of the current status of trade accounts receivable. It is reasonably possible that the Company’s estimate of the allowance for doubtful accounts will change and that losses ultimately incurred could differ materially from the amounts estimated in determining the allowance.

The Company has entered into an agreement with WEX Bank, Inc. (“WEX”) pursuant to which the Company factored a portion of its accounts receivable to WEX. This agreement allows the Company, from time to time, to pledge accounts receivable to WEX in an aggregate amount not to exceed $1,000,000. This agreement provides the Company an initial advance of 95% of the gross amount of each receivable pledged to WEX. Upon collection of the receivable, the Company receives an additional residual payment net of fixed and variable financing charges. The Company has $703,890 and $611,833, respectively, of its accounts receivable pledged to WEX that remained uncollected as of December 31, 2017 and 2016. These amounts are included on the consolidated balance sheets in the net accounts receivable balance.

Subsequent to year-end, the Company switched its factoring agreement to Transport Financial Solutions (“TFS”), which increased the Company’s factoring limit to $2,000,000.  TFS provides the Company an initial advance of 95% percent of the gross amount of each receivable pledged to TFS.

Concentrations of Credit Risk

The Company grants credit in the normal course of business to customers in the United States. The Company periodically performs credit analysis and monitors the financial condition of its customers to reduce credit risk. The Company performs ongoing credit evaluations of its customers but generally does not require collateral to support accounts receivable.

During the years ended December 31, 2017 and 2016, one customer accounted for 100% of total revenues. At December 31, 2017 and 2016, the same customer accounted for 99% and 100%, respectively, of total accounts receivable.

The Company generated revenues from four different contract locations, which represent approximately 24%, 21%, 20%, and 12%, respectively, of total revenues for the year ended December 31, 2017.

The Company generated revenues from three different contract locations, which represent approximately 32%, 30%, and 20%, respectively, of total revenues for the year ended December 31, 2016.

During the year ended December 31, 2017, one vendor accounted for 16% of total expense and a different vendor accounted for 15% of total accounts payable.

THUNDER RIDGE TRANSPORT, INC.

Notes to Consolidated Financial Statements

Note 1 - Description of Business and Summary of Significant Accounting Policies (continued)

Concentrations of Credit Risk (continued)

During the year ended December 31, 2016, one vendor accounted for 17% of total expenses, and this same vendor accounted for 47% of total accounts payable. Further, two different additional vendors accounted for another 13% and 10%, respectively, of total accounts payable.

Subsequent to year-end, the contracted location that provided 20% of the Company’s revenue for the years endeng December 31, 2017 and 2016 had been canceled and given back to USPS due to negative margins being produced on the contract.

Prepaid Expenses and Deposits

Prepaid expenses and deposits consist primarily of insurance, maintenance, and other expenses paid in advance.

Property and Equipment

Property and equipment are stated at cost. Depreciation is provided utilizing the straight-line method over the estimated useful lives for owned assets, ranging from seven to ten years.

Long-Lived Assets

The Company evaluates the recoverability of long-lived assets whenever events or changes in circumstances indicate that an asset’s carrying amount may not be recoverable. Such circumstances could include, but are not limited to (1) a significant decrease in the market value of an asset, (2) a significant adverse change in the extent or manner in which an asset is used, or (3) an accumulation of costs significantly in excess of the amount originally expected for the acquisition of an asset. The Company measures the carrying amount of the asset against the estimated undiscounted future cash flows associated with it. Should the sum of the expected future net cash flows be less than the carrying value of the asset being evaluated, an impairment loss would be recognized. The impairment loss would be calculated as the amount by which the carrying value of the asset exceeds its fair value. The fair value is measured based on quoted market prices, if available. If quoted market prices are not available, the estimate of fair value is based on various valuation techniques, including the discounted value of estimated future cash flows. The evaluation of asset impairment requires the Company to make assumptions about future cash flows over the life of the asset being evaluated. These assumptions require significant judgment, and actual results may differ from assumed and estimated amounts.

No triggering events occurred during the years ended December 31, 2017 and 2016 that required an impairment analysis for long-lived assets; accordingly, no impairment loss was recorded.

THUNDER RIDGE TRANSPORT, INC.

Notes to Consolidated Financial Statements

Note 1 - Description of Business and Summary of Significant Accounting Policies (continued)

Fuel Advance

The Company signed an agreement with Clean Energy on August 31, 2017, in which $1,000,000 was advanced and received by the Company in 2017. The advance bears interest at 8.5% and is collateralized by all Company assets. As the Company purchases fuel from a Clean Energy station, the Company reduces its fuel advance liability by $0.25 per gallon. Purchases made during 2017 were nominal.

Subsequent to year-end, this agreement was extended from December 31, 2018 to June 2021.

Members’ Equity

Profits, losses, and distributions are allocated to the members in accordance with the operating agreements.

Income Taxes

The Company has elected to be treated as an S corporation for income tax purposes. Accordingly, taxable income and losses of the Company are reported on the income tax returns of the Company’s members, and no provision for federal income taxes has been recorded in the accompanying consolidated financial statements.

The Company evaluates its tax positions taken or expected to be taken in the course of preparing the Company’s tax returns to determine whether the tax positions will more likely than not be sustained by the applicable tax authority. Tax positions not deemed to meet the more-likely-than-not threshold are not recorded as a tax benefit or expense in the current year. Interest and penalties, if applicable, are recorded in the period assessed as general and administrative expenses. However, no interest or penalties have been assessed as of December 31, 2017 and 2016.

The Tax Cuts and Jobs Act (“Tax Act”) was signed into law on December 22, 2017. The Tax Act includes significant changes to the U.S. corporate income tax system, including limitations on the deductibility of interest expense and executive compensation; eliminating the corporate alternative minimum tax (“AMT”) and changing how existing AMT credits can be realized; changing the rules related to uses and limitations of net operating loss carryforwards created in tax years beginning after December 31, 2017; and the transition of U.S. international taxation from a worldwide tax system to a territorial tax system. The Company does not expect the Tax Act to have a financial impact on it because, as an S corporation, it is not subject to federal income tax, and the tax effect of its activities accrues to the stockholders.

Fair Value of Financial Instruments

The carrying amounts of financial instruments including cash, receivables, prepaids, accounts payable, and accrued liabilities approximated fair value as of December 31, 2017 and 2016 because of the relatively short maturity of these instruments.

THUNDER RIDGE TRANSPORT, INC.

Notes to Consolidated Financial Statements

Note 1 - Description of Business and Summary of Significant Accounting Policies (continued)

Fair Value Measurements

Fair value is an exit price, representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. Fair value is determined for assets and liabilities and establishes a hierarchy for which these assets and liabilities must be grouped, based on significant levels of inputs as follows:

The determination of where assets and liabilities fall within this hierarchy is based upon the lowest level of input that is significant to the fair value measurement.

Revenue Recognition

The Company recognizes revenue in accordance with the transportation contracts, which is when the mail is delivered to the USPS processing facilities and destination post offices.

Advertising Costs

The Company expenses advertising costs as incurred. Advertising expense for the years ended December 31, 2017 and 2016 was $30,195 and $7,665, respectively.

Subsequent Events

The Company has evaluated all subsequent events through the auditors’ report date, which is the date these consolidated financial statements were available to be issued. With the exception of those matters discussed below and in Notes 1, 4, 5, and 8, there were no material subsequent events that required recognition or additional disclosure in these consolidated financial statements.

On June 1, 2018, the Company was acquired by EVO Transportation & Energy Services, Inc (“EVO”). The Company is now a wholly owned subsidiary of EVO.

THUNDER RIDGE TRANSPORT, INC.

Notes to Consolidated Financial Statements

Note 1 - Description of Business and Summary of Significant Accounting Policies (continued)

Recently Issued Accounting Pronouncements

In February 2016, the Financial Accounting Standards Board (the “FASB”) issued Accounting Standards Update (“ASU”) No. 2016-02, Leases (Topic 842) . Under the new guidance, lessees will be required to recognize the following for all leases (with the exception of short-term leases) at the commencement date: (1) a lease liability, which is a lessee’s obligation to make lease payments arising from a lease, measured on a discounted basis; and (2) a right-of-use asset, which is an asset that represents the lessee’s right to use, or control the use of, a specified asset for the lease term. The new standard is effective for private companies with fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. A modified retrospective transition approach is required for lessees for capital and operating leases existing at, or entered into after, the beginning of the earliest comparative period presented in the consolidated financial statements. The Company is evaluating the potential impact on its consolidated financial statements.

In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers , which amended revenue recognition guidance to clarify the principles for recognizing revenue from contracts with customers. The guidance requires an entity to recognize revenue when it transfers promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The guidance also requires expanded disclosures relating to the nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers. Additionally, qualitative and quantitative disclosures are required about customer contracts, significant judgments and changes in judgments, and assets recognized from the costs to obtain or fulfill a contract. ASU No. 2014-09 is effective for annual reporting in fiscal years that begin after December 15, 2018. The Company is in the process of evaluating the impact that this new guidance will have on its consolidated financial statements.

Note 2 - Going Concern

The Company has incurred substantial losses in 2017 and 2016 of $1,063,110 and $951,028, respectively. For the years ended December 31, 2017 and 2016, the Company has continued to experience decreases in working capital of $1,222,085 and $946,192, respectively, and deficits in equity of $1,939,006 and $703,511, respectively.

The Company’s losses and deficits in working capital and equity, described above, raise substantial doubt about the Company’s ability to continue as a going concern.

The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern; however, the above conditions raise substantial doubt about the Company’s ability to do so. The consolidated financial statements do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or the amounts and classification of liabilities that may result, should the Company be unable to continue as a going concern.

Depreciation expense for the years ended December 31, 2017 and 2016 was $104,045 and $112,365, respectively.

Accounts payable and accrued expenses consist of the following:

Note 4 - Lines-of-Credit

For the years ended December 31, 2017 and 2016, the Company had three line-of-credit agreements with a bank that provided for a borrowing capacity of approximately $525,000. Amounts outstanding bear interest between 5.59% to 6.25% and are secured by equipment. One of the lines-of-credit had a maturity date in 2017, was not extended, and was subsequently paid off in February 2018. The remaining two lines-of-credits had the maturity dates extended from July 2018 to October 2018. As of December 31, 2017 and 2016, the Company had an outstanding balance of $521,864 and $524,750, respectively, on these lines-of-credit.

THUNDER RIDGE TRANSPORT, INC.

Notes to Consolidated Financial Statements

Note 5 - Long-Term Debt

Long-term debt consists of:

Maturities of long-term obligations are as follows:

THUNDER RIDGE TRANSPORT, INC.

Notes to Consolidated Financial Statements

Note 6 - Commitments and Contingencies

Operating Leases

The Company leases equipment and vehicles under monthly and non-cancelable operating leases. Payments on these leases range from $50 and $3,000 and mature between 2018 and August 2024. Total rent expense for the years ended December 31, 2017 and 2016 was $3,405,925 and $2,461,756, respectively.

Future minimum lease payments under these leases are approximately as follows:

Litigation

In the normal course of business, the Company is party to litigation from time to time. The Company maintains insurance to cover certain actions and believes that resolution of such litigation will not have a material adverse effect on the Company.

Note 7 - Employee Benefit Plan

The Company maintains a Health, Welfare and Pension plan for eligible employees in accordance with the Department of Labor under the Service Contract Act. These payments are earned on all eligible hours up to the maximum of 40 hours per week and are determined on the hourly rates set by the Department of Labor depending on the employee’s work location and specific vehicle type. Employer contributions for the years ended December 31, 2017 and 2016 were $1,454,389 and $1,247,713, respectively. These amounts are included in cost of labor on the consolidated statements of operations.

In compliance with the U.S. Department of Labor Wage Determination, eligible employees are paid a minimum of 10 paid holidays per year.

Note 8 - Related Party Transactions

At December 31, 2017 and 2016, the Company had received advances from a member for $19,000 and $0, respectively. This advance was paid off in January 2018.

For the years ending December 31, 2017 and 2016, the Company made distributions of $172,385 and $171,676, respectively, to members in accordance with the operating agreements.

THUNDER RIDGE TRANSPORT, INC.

Condensed Consolidated Financial Statements

March 31, 2018

THUNDER RIDGE TRANSPORT, INC.

Table of Contents

See notes to unaudited condensed consolidated financial statements.

See notes to unaudited condensed consolidated financial statements.

Supplemental disclosure of cash flow information:

Cash paid for interest for the periods ended March 31, 2018 and 2017 was $28,318 and $37,267, respectively.

See notes to unaudited condensed consolidated financial statements.

THUNDER RIDGE TRANSPORT, INC.

Notes to Unaudited Condensed Consolidated Financial Statements

Note 1 - Description of Business and Summary of Significant Accounting Policies

Thunder Ridge Transport, Inc. (the “Company”) and its subsidiaries provide transportation services throughout the Midwest including operations in Missouri, Kansas, Iowa, Tennessee, New York, Pennsylvania, and Texas. The Company was founded in 2000, and its primary business is interstate highway contract routes operated for the United States Postal Service (“USPS”).

The Company competitively bids on transportation contracts that detail the movement of mail between processing facilities and to destination post offices. Customer contracts are long term in nature with four-year terms and often are renewed to the incumbent if appropriate service has been performed. Contracts are bid and performed in accordance with all contract requirements including but not limited to Service Contract Act requirements, Department of Transportation regulations (federal and state), and all other applicable local and state regulations.

The condensed consolidated statements of operations, balance sheets, and statements of cash flows included in this report have been prepared by the Company. In our opinion, all adjustments (which include only normal recurring adjustments) necessary to present fairly the financial position at March 31, 2018 and results of operations and cash flows for all periods have been made.

Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles in the United States have been condensed or omitted. These condensed consolidated financial statements should be read in conjunction with our consolidated financial statements and notes thereto included in our Form 8K/A for the years ended December 31, 2017 and 2016. The results of operations for the period ended March 31, 2018 are not necessarily indicative of the operating results for the full year.

Principles of Consolidation

The accompanying condensed consolidated financial statements include the accounts of Thunder Ridge Transport, Inc. and its subsidiary, Thunder Ridge Logistics, LLC. All intercompany accounts and transactions have been eliminated in consolidation, and there was no activity for Thunder Ridge Logistics, LLC.

Use of Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

The condensed consolidated financial statements include some amounts that are based on management’s best estimates and judgments. The most significant estimates relate to the allowance for uncollectible accounts receivable, depreciation, contingencies, and going concern. These estimates may be adjusted as more current information becomes available, and any adjustment could be significant.

THUNDER RIDGE TRANSPORT, INC.

Notes to Unaudited Condensed Consolidated Financial Statements

Note 1 - Description of Business and Summary of Significant Accounting Policies (continued)

Accounts Receivable

For the year ended December 31, 2017, t he Company had entered into an agreement with WEX Bank, Inc. (“WEX”) pursuant to which the Company factored a portion of its accounts receivable to WEX. This agreement allows the Company, from time to time, to pledge accounts receivable to WEX in an aggregate amount not to exceed $1,000,000. This agreement provided the Company an initial advance of 95% of the gross amount of each receivable pledged to WEX. Upon collection of the receivable, the Company receives an additional residual payment net of fixed and variable financing charges. The Company had $703,890 of its accounts receivable pledged to WEX that remained uncollected as of December 31, 2017. This amount is included on the condensed consolidated balance sheets in the net accounts receivable balance.

During January 2018, the Company switched its factoring services to Transport Financial Solutions (“TFS”), which increased the Company’s factoring limit to $2,000,000.  TFS provides the Company an initial advance of 95% percent of the gross amount of each receivable pledged to TFS. The Company had $1,313,013 of its accounts receivable pledged to TFS that remained uncollected as of March 31, 2018. This amount is included on the condensed consolidated balance sheets in the net accounts receivable balance.

Concentrations of Credit Risk

The Company grants credit in the normal course of business to customers in the United States. The Company periodically performs credit analysis and monitors the financial condition of its customers to reduce credit risk. The Company performs ongoing credit evaluations of its customers but generally does not require collateral to support accounts receivable.

During the periods ended March 31, 2018 and 2017, one customer accounted for 100% of total revenues. For the periods ended March 31, 2018 and December 31, 2017, the same customer accounted for 98% and 100%, respectively, of total accounts receivable.

The Company generated revenues from four different locations, which represent approximately 34%, 17%, 14%, and 12%, respectively, of total revenues for the period ended March 31, 2018.

The Company generated revenues from four different locations, which represent approximately 27%, 23%, 21% and 13%, respectively, of total revenues for the period ended March 31, 2017.

During the period ended March 31, 2018, one vendor accounted for 12% of total expense and a different vendor accounted for 15% of total accounts payable.

During the period ended March 31, 2017, the same vendor accounted for 13% of total expenses.

For the period ended December 31, 2017, this same vendor accounted for 15% of total accounts payable.

Subsequent to period-end, the contracted location that provided 12% and 21% of the Company’s revenue for the periods ended March 31, 2018 and 2017, respectively, had been canceled and given back to USPS due to negative margins being produced on the contract.

THUNDER RIDGE TRANSPORT, INC.

Notes to Unaudited Condensed Consolidated Financial Statements

Note 1 - Description of Business and Summary of Significant Accounting Policies (continued)

Fuel Advance

The Company signed an agreement with Clean Energy on August 31, 2017, in which $1,000,000 was advanced and received by the Company in 2017. The advance bears interest at 8.5% and is collateralized by all Company assets. As the Company purchases fuel from a Clean Energy station, the Company reduces its fuel advance liability by $0.25 per gallon. Purchases made during 2017 and the first quarter of 2018 were nominal.

Subsequent to period-end, this agreement was extended from December 31, 2018 to June 2021.

Members’ Equity

Profits, losses, and distributions are allocated to the members in accordance with the operating agreements.

Income Taxes

The Company has elected to be treated as an S corporation for income tax purposes. Accordingly, taxable income and losses of the Company are reported on the income tax returns of the Company’s members, and no provision for federal income taxes has been recorded in the accompanying condensed consolidated financial statements.

The Company evaluates its tax positions taken or expected to be taken in the course of preparing the Company’s tax returns to determine whether the tax positions will more likely than not be sustained by the applicable tax authority. Tax positions not deemed to meet the more-likely-than-not threshold are not recorded as a tax benefit or expense in the current year. Interest and penalties, if applicable, are recorded in the period assessed as general and administrative expenses. However, no interest or penalties have been assessed as of March 31, 2018 and 2017.

The Tax Cuts and Jobs Act (“Tax Act”) was signed into law on December 22, 2017. The Tax Act includes significant changes to the U.S. corporate income tax system, including limitations on the deductibility of interest expense and executive compensation; eliminating the corporate alternative minimum tax (“AMT”) and changing how existing AMT credits can be realized; changing the rules related to uses and limitations of net operating loss carryforwards created in tax years beginning after December 31, 2017; and the transition of U.S. international taxation from a worldwide tax system to a territorial tax system. The Company does not expect the Tax Act to have a financial impact on it because, as an S corporation, it is not subject to federal income tax, and the tax effect of its activities accrues to the stockholders.

THUNDER RIDGE TRANSPORT, INC.

Notes to Unaudited Condensed Consolidated Financial Statements

Note 1 - Description of Business and Summary of Significant Accounting Policies (continued)

Revenue Recognition

The Company recognizes revenue in accordance with the transportation contracts, which is when the mail is delivered to the USPS processing facilities and destination post offices.

Advertising Costs

The Company expenses advertising costs as incurred. Advertising expense for the periods ended March 31, 2018 and 2017 was $8,779 and $1,223, respectively.

Subsequent Events

The Company has evaluated all subsequent events through the issuance of these condensed consolidated financial statements, which is the date these condensed consolidated financial statements available to be issued. With the exception of those matters discussed below and in Notes 1 and 4, there were no material subsequent events that required recognition or additional disclosure in these condensed consolidated financial statements.

On June 1, 2018, the Company was acquired by EVO Transportation & Energy Services, Inc (“EVO”). The Company is now a wholly owned subsidiary of EVO.

Recently Issued Accounting Pronouncements

In February 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2016-02, Leases (Topic 842) . Under the new guidance, lessees will be required to recognize the following for all leases (with the exception of short-term leases) at the commencement date: (1) a lease liability, which is a lessee’s obligation to make lease payments arising from a lease, measured on a discounted basis; and (2) a right-of-use asset, which is an asset that represents the lessee’s right to use, or control the use of, a specified asset for the lease term. The new standard is effective for private companies with fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. A modified retrospective transition approach is required for lessees for capital and operating leases existing at, or entered into after, the beginning of the earliest comparative period presented in the condensed consolidated financial statements. The Company is evaluating the potential impact on its condensed consolidated financial statements.

In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers , which amended revenue recognition guidance to clarify the principles for recognizing revenue from contracts with customers. The guidance requires an entity to recognize revenue when it transfers promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The guidance also requires expanded disclosures relating to the nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers. Additionally, qualitative and quantitative disclosures are required about customer contracts, significant judgments and changes in judgments, and assets recognized from the costs to obtain or fulfill a contract. ASU No. 2014-09 is effective for annual reporting in fiscal years that begin after December 15, 2018. The Company is in the process of evaluating the impact that this new guidance will have on its condensed consolidated financial statements.

THUNDER RIDGE TRANSPORT, INC.

Notes to Unaudited Condensed Consolidated Financial Statements

Note 2 - Going Concern

The Company’s continued losses and deficits in working capital and equity raise substantial doubt about the Company’s ability to continue as a going concern.

The accompanying condensed consolidated financial statements have been prepared assuming that the Company will continue as a going concern; however, the above conditions raise substantial doubt about the Company’s ability to do so. The condensed consolidated financial statements do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or the amounts and classification of liabilities that may result should the Company be unable to continue as a going concern.

Depreciation expense for the periods ended March 31, 2018 and 2017 was $24,036 and $26,068, respectively.

Accounts payable and accrued expenses consist of the following:

THUNDER RIDGE TRANSPORT, INC.

Notes to Unaudited Condensed Consolidated Financial Statements

Note 4 - Lines-of-Credit

For the periods ended March 31, 2018 and December 31, 2017, the Company had two lines-of-credit agreements with a bank that provided for a borrowing capacity of approximately $425,000. Amounts outstanding bear interest between 5.59% to 6.25% and are secured by equipment. The two lines-of-credit had the maturity dates extended from July 2018 to October 2018. As of March 31, 2018 and December 31, 2017, the Company had an outstanding balance of $421,739 and $521,864, respectively, on these lines-of-credit.