Exhibit 99.2 

THE HERB CHAMBERS COMPANIES

COMBINED FINANCIAL STATEMENTS AND

COMBINING INFORMATION

AS OF AND FOR THE YEARS ENDED
DECEMBER 31, 2024 AND 2023

THE HERB CHAMBERS COMPANIES

CONTENTS

	CBIZ CPAs P.C.
	CityPlace I, 185 Asylum Street
	25th Floor
	Hartford, CT 06103
	P: 860.760.0600

Independent Auditors’ Report

Mr. Herbert G. Chambers

The Herb Chambers Companies

We have audited the combined financial statements of The Herb Chambers Companies (the “Group”), which comprise the balance sheet as of December 31, 2024, and the related combined statements of operations and comprehensive income, changes in equity, and cash flows for the year then ended, and the related notes to the combined financial statements (collectively referred to as the “financial statements”).

In our opinion, the accompanying financial statements present fairly, in all material respects, the financial position of the Group as of December 31, 2024, and the results of its operations and its cash flows for the fiscal year then ended in accordance with accounting principles generally accepted in the United States of America.

Basis for Opinion

We conducted our audit in accordance with auditing standards generally accepted in the United States of America (“GAAS”). Our responsibilities under those standards are further described in the Auditors’ Responsibilities for the Audit of the Financial Statements section of our report. We are required to be independent of the Group and to meet our other ethical responsibilities, in accordance with the relevant ethical requirements relating to our audit. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Prior Period Financial Statements

The financial statements of the Group as of and for the year ended December 31, 2023, were audited by Federman, Lally & Remis LLC whose report dated April 15, 2024, expressed an unmodified opinion on those statements.

Responsibilities of Management for the Financial Statements

Management is responsible for the preparation and fair presentation of the financial statements in accordance with accounting principles generally accepted in the United States of America, and for the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the financial statements, management is required to evaluate whether there are conditions or events, considered in the aggregate, that raise substantial doubt about the Group’s ability to continue as a going concern for one year after the date that the financial statements are issued.

CBIZ.COM

Auditors’ Responsibilities for the Audit of the Financial Statements

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance but is not absolute assurance and therefore is not a guarantee that an audit conducted in accordance with GAAS will always detect a material misstatement when it exists. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. Misstatements are considered material if there is a substantial likelihood that, individually or in the aggregate, they would influence the judgment made by a reasonable user based on the financial statements.

In performing an audit in accordance with GAAS, we:

We are required to communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit, significant audit findings, and certain internal control–related matters that we identified during the audit.

Supplementary Information

Our audit was conducted for the purpose of forming an opinion on the financial statements taken as a whole. The accompanying 2024 combining information included in the accompanying Schedules I through II is presented for purposes of additional analysis. Such information is the responsibility of management and was derived from and relates directly to the underlying accounting and other records used to prepare the financial statements. The information has been subjected to the auditing procedures applied in the audit of the financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the financial statements or to the financial statements themselves, and other additional procedures in accordance with GAAS. In our opinion, the information is fairly stated in all material respects in relation to the financial statements as a whole. The 2023 combining information included in the accompanying schedules III and IV was subjected to the auditing procedures applied in the 2023 audit of the basic combined financial statements by Federman, Lally & Remis, LLC whose reported dated April 15, 2024 stated that the information was fairly stated in all material respects in relation to the 2023 financial statements taken as a whole.

Hartford, CT

April 9, 2025

THE HERB CHAMBERS COMPANIES

COMBINED BALANCE SHEETS

DECEMBER 31, 2024 AND 2023

The accompanying notes are an integral part of these combined financial statements.

THE HERB CHAMBERS COMPANIES

COMBINED BALANCE SHEETS

DECEMBER 31, 2024 AND 2023

The accompanying notes are an integral part of these combined financial statements.

THE HERB CHAMBERS COMPANIES

COMBINED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME

FOR THE YEARS ENDED DECEMBER 31, 2024 AND 2023

The accompanying notes are an integral part of these combined financial statements.

THE HERB CHAMBERS COMPANIES

COMBINED STATEMENTS OF CHANGES IN EQUITY

FOR THE YEARS ENDED DECEMBER 31, 2024 AND 2023

The accompanying notes are an integral part of these combined financial statements.

THE HERB CHAMBERS COMPANIES

COMBINED STATEMENTS OF CASH FLOWS

FOR THE YEARS ENDED DECEMBER 31, 2024 AND 2023

The accompanying notes are an integral part of these combined financial statements.

THE HERB CHAMBERS COMPANIES

COMBINED STATEMENTS OF CASH FLOWS

FOR THE YEARS ENDED DECEMBER 31, 2024 AND 2023

Supplementary Disclosures (Note 12)

The accompanying notes are an integral part of these combined financial statements.

THE HERB CHAMBERS COMPANIES

NOTES TO COMBINED FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2024 AND 2023

Note 1 - Summary of Significant Accounting Policies

Business Operations And Principles of Combination

The Herb Chambers Companies’ (the Group) combined operations consist of sales of new and used vehicles, finance, warranty and insurance products, service, collision repairs, and parts in the New England area. The Group’s trade receivables are due primarily from retail customers. In addition, the majority of the vehicle and contract receivables are due from manufacturers’ financing subsidiaries and financial institutions relating to sales of new and used vehicles with the balance due from various wholesale customers. The Group purchases vehicles, parts and supplies from the manufacturers and participates in incentive programs. These transactions result in both a receivable from and payable to the manufacturers.

The Group includes Jennings Road Management Corp. (JRM), established to provide management, insurance, and other related services to the Herb Chambers automobile dealerships and other entities owned by Herbert G. Chambers. The Group also includes HGC Holdings, LLC, established to hold investments and provide liquidity financing to the Herb Chambers dealerships.

The combined financial statements of the Group are prepared in conformity with accounting principles generally accepted in the U.S. (GAAP) and all the intercompany balances and transactions have been eliminated in the combined statements. These entities are owned by Herbert G. Chambers. These entities include:

THE HERB CHAMBERS COMPANIES

NOTES TO COMBINED FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2024 AND 2023

Note 1 - Summary of Significant Accounting Policies (Continued)

Business Operations And Principles of Combination (Continued)

Effective April 1, 2023, Herb Chambers of Sudbury, Inc. relinquished its Jaguar franchise to the manufacturer for financial considerations and additional Land Rover inventory. Herb Chambers of Sudbury, Inc. remains an authorized Jaguar service center and the ability to sell certified pre-owned Jaguar inventory. In December 2024, the Group sold one of its Honda franchises and assets related to the operations of Herb Chambers Route 9, Inc.

THE HERB CHAMBERS COMPANIES

NOTES TO COMBINED FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2024 AND 2023

Note 1 - Summary of Significant Accounting Policies (Continued)

Revenue Recognition

The Group recognizes revenue in accordance with Accounting Standards Codification (ASC) Topic 606, “Revenue from Contracts with Customers”, which provides a five-step model for recognizing revenue with customers as follows:

In the following table of sales, cost of sales and gross profit are disaggregated by major lines of goods and services.

THE HERB CHAMBERS COMPANIES

NOTES TO COMBINED FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2024 AND 2023

Note 1 - Summary of Significant Accounting Policies (Continued)

Revenue Recognition (Continued)

The following describes the major product lines, which represent the disaggregation of revenue to transactions that are similar in nature, amount, timing, uncertainties and economic factors.

New Retail Vehicle and Used Retail Vehicle Sales - Revenue from the retail sale of a vehicle is recognized at a point in time, as all performance obligations are satisfied when a contract is signed by the customer, financing has been arranged or collectability is probable and the control of the vehicle is transferred to the customer. The transaction price for a retail vehicle sale is specified in the contract with the customer and includes all cash and non-cash consideration. In a retail vehicle sale, customers often trade in their current vehicle. The trade-in is measured at its stand-alone selling price in the contract, utilizing various third-party pricing sources. There are no other non-cash forms of consideration related to retail sales. All vehicle rebates are applied to the vehicle purchase price at the time of the sale and are therefore incorporated into the price of the contract at the time of the exchange.

Used Vehicle Wholesale Sales - When the Group uses a third-party auction to facilitate the sale of used vehicles, the Group has determined that the auction acts as an agent under the agreement. Therefore, the Group recognizes revenues and cost of sales on a gross basis upon delivery of the vehicle to the customer, which is the point at which transfer of control occurs and when the performance obligation is satisfied. The transaction price for wholesale vehicle sales is established by the winning bid under the auction process and is generally settled within 7 days of the satisfaction of the performance obligation.

Service, Body and Parts Sales - Revenue from service, body and parts sales is recognized upon the transfer of control of the parts or service to the customer. The Group allows for customer returns on sales of certain parts inventory up to 7 days after the sale and are subject to a 20% handling charge.

Finance and Insurance Sales, net - Revenue from finance and insurance sales is recognized, net of estimated charge-backs, at the time of the sale of the related vehicle. As a part of the vehicle sale, we seek to arrange financing for customers and sell a variety of add-ons, such as extended warranty service contracts. These products are inherently attached to the governing vehicle and performance of the obligation cannot be performed without the underlying sale of the vehicle. The Group acts as an agent in the sale of these contracts as the pricing is set by the third-party provider, and our commission is preset. A portion of the transaction price related to sales of finance and insurance contracts is considered variable consideration and is estimated and recognized upon the sale of the contract under the standard.

THE HERB CHAMBERS COMPANIES

NOTES TO COMBINED FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2024 AND 2023

Note 1 - Summary of Significant Accounting Policies (Continued)

Revenue recognition (Continued)

The Group may be charged back in the future for commissions received on F&I contracts in the event of early termination by the customer. A reserve for future amounts estimated to be charged back, representing variable consideration, is recorded as a reduction to finance and insurance, net in the combined statements of operations. The reserve is estimated based on the Group’s historical chargeback results and the termination provisions of the applicable contracts, and was $8,387,000 and $7,629,000 at December 31, 2024 and 2023, respectively and is recorded in accounts payable and other accrued expenses in the accompanying combined balance sheets.

Other Income, net - Other income includes third party service contracts for which the Group receives a commission, documentation fees for processing paperwork as well as revenue from manufacturer programs that are recorded in the period earned. Provisions for rebates to customers, estimated allowances, and other adjustments are provided for in the same period the related sales are recorded.

Concentration of credit risk

Financial instruments that potentially subject the Group to concentration of credit risk consist primarily of cash and accounts receivable. The Group maintains its cash in bank deposits at financial institutions with high credit standing. The balances, at times, may exceed federally insured limits. Accounts receivables are typically short-term, and all probable credit losses have been considered in the establishment of the allowance for credit losses. Periodically, the Group reviews accounts receivable and adjusts the allowance based on current circumstances and charges off uncollectible receivables when all attempts to collect have failed. The Group typically does not charge interest on past due receivables. The Group has recorded an allowance associated with the various receivables (see Note 4).

Investments

The Group has investments classified as available-for-sale. Available-for-sale investments are those which the Group may decide to sell if needed for liquidity, asset liability management, or other reasons. Available-for-sale securities are reported at fair value, with unrealized gains or losses included as a separate component of equity and net income and comprehensive income.

THE HERB CHAMBERS COMPANIES

NOTES TO COMBINED FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2024 AND 2023

Note 1 - Summary of Significant Accounting Policies (Continued)

Inventories

New vehicles are stated at a specific cost determined by the last-in first-out (LIFO) method of valuation. Used vehicles are valued at the lower of cost or net realize value. Net realizable value is considered to be the lower of wholesale “as is” value, determined by the current used vehicle guidebook, less estimated recondition cost, or the estimated current wholesale market value of the unit as determined by management on specific unit basis. Loaner and rental vehicles and the related liability are recorded at cost at the time the vehicles are placed in service. The Group receives loaner assistance money from the manufacturer which is applied against recorded cost and the Group makes market value adjustments to these vehicles. Parts and accessories are generally stated at the current manufactures’ catalog prices, which approximate cost determined on the first-in, first out or specific identification basis.

Property And Equipment

Property and equipment is stated at cost, or fair value for assets acquired in a business combination, less accumulated depreciation. Expenditures for maintenance and repairs are charged to expenses in the period incurred. Depreciation is provided primarily by use of straight-line methods over the estimated useful lives of the assets, which range from five to thirty-nine years. Leasehold improvements are amortized over the shorter of the lease term or the estimated useful life of the improvement. When property and equipment are retired or otherwise disposed of, the appropriate accounts are relieved of cost and accumulated depreciation, and any resulting gain or loss is recognized.

The Group reviews the carrying value of property and equipment for impairment whenever events and circumstances indicate that the carrying value of an asset may not be recoverable from the estimated future cash flows expected to result from its use and eventual disposition. In cases where undiscounted expected future cash flows are less than the carrying value, an impairment loss is recognized equal to an amount by which the carrying value exceeds the fair value of assets. The factors considered by management in performing this assessment include current operating results, trends and prospects, as well as the effects of obsolescence, demand, competition, and other economic factors. No impairment losses were recognized for the years ended December 31, 2024 and 2023.

THE HERB CHAMBERS COMPANIES

NOTES TO COMBINED FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2024 AND 2023

Note 1 - Summary of Significant Accounting Policies (Continued)

Goodwill

Goodwill results from business acquisitions and represents the excess of the purchase price over the fair value of acquired assets and assumed liabilities. In accordance with GAAP, goodwill is not amortized. Goodwill is assessed at least annually for impairment, and any such impairment will be recognized in the period it is identified. Factors considered by the Group in performing this review, include current operating income, trends, fair value of reporting units, and other economic factors.

For the years ended December 31, 2024 and 2023, the Group had positive equity and the Group elected to perform a qualitative assessment to determine if it was more likely than not that the fair value of the reporting unit exceeded its carrying value, including goodwill. The qualitative assessment indicated that it was more likely than not that the fair value of the reporting unit exceeded its carrying value, resulting in no impairment for the operations. In relation to the sale of Herb Chambers Route 9, Inc., the Group recorded an impairment loss during the year ended December 31, 2024 for the remaining goodwill of $2,942,017, included in gain from sale of franchise in the accompanying combined statements of operations and comprehensive income.

Insurance Program

The Group administers self-insured programs for the workers’ compensation and property and casualty insurance coverage for the dealerships owned by Herbert G. Chambers. As part of these programs, the Group collects from the dealerships base premiums and loss payments. The payment of claims is administered by third party service providers. Since the Group is not an insurance company, it accounts for these payments, net of related premiums and insurance claims paid, on the combined balance sheets as an insurance loss fund liability (see Note 10).

Comprehensive Income

Comprehensive income consists of net income and other gains and losses affecting equity that, under GAAP, are excluded from net income. For the Group, such items consist of unrealized gains and losses on marketable fixed income securities classified as available-for-sale.

THE HERB CHAMBERS COMPANIES

NOTES TO COMBINED FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2024 AND 2023

Note 1 - Summary of Significant Accounting Policies (Continued)

Advertising

The Group expenses advertising costs as incurred. The Group receives advertising assistance from the manufacturers, which is treated as a reduction of advertising expenses. Advertising costs for the years ended December 31, 2024 and 2023, net of assistance, were approximately $19,541,000 and $14,300,000, respectively.

Income Taxes

The owner has elected, for federal income tax purposes, to have the underlying companies taxed as small business corporations (S Corporations) and a limited liability company (LLC) treated as a partnership. These elections provide for the net income or loss of the entities to be reported on the owner’s personal federal and state income tax returns.

The Group follows guidance issued by the Financial Accounting Standards Board (FASB) with respect to accounting for uncertainty in income taxes. A tax position is recognized as a benefit only if it is more likely than not that the tax position would be sustained in a tax examination, with a tax examination being presumed to occur. The amount recognized is the largest amount of tax benefit that is greater than 50% likely of being realized on examination. For tax positions not meeting the more-likely-than-not test, no tax benefit is recorded.

Due to its pass-through status, the Group is not subject to U.S. federal income tax. The Group does not have any unrecognized tax benefits and does not expect that to significantly change in the next 12 months.

Under the Massachusetts corporate tax reform provisions, unitary combining reporting is required for multi-state corporations. Under the definitions, the Group and other related party entities are considered a unitary business, under common ownership and part of a combined group for purposes of filing a combined tax return in Massachusetts. In September 2021, Massachusetts legislature enacted an elective pass-through entity excise tax. Under the legislation, for tax years beginning on or after January 1, 2021, entities taxed as “S” corporations and partnerships may elect annually to be subject to the pass-through entity excise at a rate of 5%. No provision is made for deferred state income tax in these combined financial statements due to its immateriality.

Herb Chambers Cadillac, Inc. is a Rhode Island entity and pays no state tax on its income and receives no benefit from its losses, if any, in accordance with the current state tax laws. In lieu of State of Rhode Island corporate income taxes, the owner is taxed on this entity’s taxable income. JRM also has Rhode Island return filing requirements, and in lieu of corporate income tax, the owner is taxed on this entity’s taxable income.

THE HERB CHAMBERS COMPANIES

NOTES TO COMBINED FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2024 AND 2023

Note 1 - Summary of Significant Accounting Policies (Continued)

Income Taxes (Continued)

JRM and HGC Holdings, LLC are Connecticut entities and pay no state tax on income and receive no benefit from losses, if any, in that state, in accordance with current state tax laws. In lieu of State of Connecticut income taxes, the Group’s owner is taxed on the Group’s taxable income. During the years ended December 31, 2024 and 2023, state temporary differences were immaterial and, accordingly, no deferred state tax provision for income taxes is reflected in the accompanying combined financial statements.

JRM and all other entities included in this combined financial statement, other than Herb Chambers Cadillac, Inc. and HGC Holdings, LLC are taxed at the corporate level for Massachusetts state income tax purposes in accordance with current state tax laws. State income tax expense for the years ended December 31, 2024 and 2023 was approximately $8,932,000 and $6,143,000, respectively, and is included in operating expenses in the accompanying combined statements of operations and comprehensive income.

Accounting For Uncertainty In Income Taxes

The Group evaluates all significant tax positions as required by GAAP. As of December 31, 2024, the Group does not believe that it has taken any positions that would require the recording of any additional tax liability nor does it believe that there are any unrealized tax benefits that would either increase or decrease within the next year. The Group files federal, Massachusetts, Connecticut and Rhode Island income tax returns, which represent the major tax jurisdictions of the Group.

Delivery Cost

The Group’s policy is to expense delivery cost in excess of manufactures’ reimbursements as operating expenses.

Sales Taxes Collected And Remitted To Governmental Authorities

The Group collects sales tax from customers in various state and local taxing jurisdictions and remits these amounts monthly to applicable taxing authorities. These amounts are excluded from net sales.

THE HERB CHAMBERS COMPANIES

NOTES TO COMBINED FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2024 AND 2023

Note 1 - Summary of Significant Accounting Policies (Continued)

Basis of Accounting And Use Of Estimates

The accompanying combined financial statements have been prepared in conformity with GAAP following the accrual basis of accounting. The preparation of combined 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 combined financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Significant estimates include used vehicle lower of cost or net realizable value, useful lives of property and equipment, estimated value of goodwill, allowance for credit losses, unearned prepaid maintenance revenue, self-insurance reserves, and the provision for chargebacks. It is reasonably possible that these estimates may change and the effect may be material.

Major Suppliers And Dealership Agreements

The Group enters into dealership agreements with the manufacturers. These agreements permit the Group to stock, sell and service vehicles and products of the manufacturers and use of the manufacturers’ name and trade symbols. These transactions result in both a receivable from and payable to the manufacturers. The Group’s sales could be impacted by the manufacturers’ inability or unwillingness to supply the Group with an adequate number or mix of vehicles.

The dealership agreements generally limit the location of the dealership and give the manufacturer rights to approve changes in the dealership ownership. The manufacturer is entitled to terminate the dealership agreement if the Group is in breach of its terms.

Leases

Right of use assets represent the Group’s right to use an underlying asset for the lease term and operating lease liabilities represent the Group’s obligation to make lease payments arising from the lease. Right of use assets and liabilities are recognized at the lease commencement date based on the estimated present value of lease payments over the lease term.

If the lease does not provide an implicit rate, an incremental borrowing rate based on the information available at the lease commencement date is used in determining the present value of lease payments. The incremental borrowing rate for operating leases that commenced in the period is determined by using the Group’s incremental borrowing rates.

THE HERB CHAMBERS COMPANIES

NOTES TO COMBINED FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2024 AND 2023

Note 1 - Summary of Significant Accounting Policies (Continued)

Leases (Continued)

The Group has elected not to recognize a right of use asset and operating lease liability for leases with an initial term of twelve months or less as well as any lease covering immaterial assets. Lease expense is recognized for these leases on a straight-line basis over the lease term. Variable lease payments that are dependent on usage, output, or may vary for other reasons, are excluded from lease payments in the measurement of the right of use asset and operating lease liability, and accordingly are recognized as lease expense in the period the obligation for those payments is incurred. For lease agreements entered into or reassessed after the adoption of Topic 842, lease and non-lease components are combined.

Certain leases include renewal and/or termination options, with renewal terms that can extend the lease term from one to five years, and the exercise of lease renewal options under these leases is at the Group’s sole discretion. These options are included in the lease term used to determine right-of-use assets and corresponding liabilities when it is reasonably certain the Group will exercise the option. The depreciable life of assets and leasehold improvements are limited by the expected lease term. The Group’s lease agreements do not contain any material residual value guarantees or material restrictive covenants.

Reclassifications

Certain amounts in the 2023 combined financial statements have been reclassified to the 2024 presentation. These reclassifications have no effect on previously reported net income.

Subsequent Events

In preparing these combined financial statements, the Group has evaluated events and transactions for potential recognition or disclosure through April 9, 2025, the date the combined financial statements were available to be issued.

Note 2 - Investments

Investments consist mainly of money market instruments, publicly traded fixed income, equity and other investment securities and are classified as available-for-sale because they can be sold at any time. Cost is determined by the specific identification method. Unrealized gains and losses on marketable equity and other investment securities are included in net income. Unrealized gains and losses on marketable fixed income securities are included in other comprehensive income.

THE HERB CHAMBERS COMPANIES

NOTES TO COMBINED FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2024 AND 2023

Note 2 – Investments (Continued)

Investments classified as available-for-sale consisted of the following at December 31, 2024:

Investments classified as available-for-sale consisted of the following at December 31, 2023:

Contractual maturities of available-for-sale debt securities at December 31, 2024, are as follows:

THE HERB CHAMBERS COMPANIES

NOTES TO COMBINED FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2024 AND 2023

Note 2 – Investments (Continued)

Proceeds and net investment income consisted of the following for the years ended December 31, 2024 and 2023:

Note 3 - Fair Value

GAAP defines fair value as the price that would be received for an asset or paid to transfer a liability (an exit price) in the Group’s principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date.

A fair value hierarchy requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. There are three levels of inputs that may be used to measure fair value:

Level 1: Quoted prices (unadjusted) for identical assets or liabilities in active markets that the entity has the ability to access as of the measurement date. The fair values of money market funds and marketable equity securities that are readily marketable are determined by obtaining quoted prices on nationally recognized securities exchanges.

THE HERB CHAMBERS COMPANIES

NOTES TO COMBINED FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2024 AND 2023

Note 3 - Fair Value (Continued)

Level 2: Significant other observable inputs other than Level 1 prices such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data. The fair values of certificates of deposit are determined through inquiries of the financial institutions from which they originated. The fair values are typically the original principal balance plus accrued interest earned with no discounts for credit quality or liquidity determined to be applicable (market approach valuations technique). The fair values of the Group’s marketable fixed income securities and other investments are determined by matrix pricing, which is a mathematical technique widely used in the industry to value debt securities without relying exclusively on quoted prices for the specific securities but rather by relying on the securities’ relationship to other benchmark quoted securities (market approach valuation technique).

Level 3: Significant unobservable inputs that reflect a reporting entity’s own assumptions about the assumptions that market participants would use in pricing an asset or liability. The Group has no Level 3 financial instruments at December 31, 2024 and 2023.

The asset or liability’s fair value measurement level within the fair value hierarchy is based on the lowest level of input that is significant to the fair value measurement. Valuation techniques used need to maximize the use of observable inputs and minimize the use of observable inputs. There have been no changes in the methodologies used at December 31, 2024 and 2023.

Investments measured at fair value on a recurring basis are summarized below:

THE HERB CHAMBERS COMPANIES

NOTES TO COMBINED FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2024 AND 2023

Note 3 - Fair Value (Continued)

Note 4 - Accounts Receivable

The Group adopted the provisions of ASU No. 2016-13, Financial Instruments – Credit Losses (Topic 326) on January 1, 2023 and, accordingly, measures credit losses on receivables using an expected loss model. The adoption of ASU 2016-13 did not have a material impact on the combined financial statements and related disclosures.

Accounts receivable classifications include the following:

The Group performs ongoing credit evaluations of its customers’ financial condition and generally does not require collateral for accounts receivable arising in the normal course of business. Allowances for potential credit losses are determined by considering the financial condition of customers and other economic factors affecting customers, the Group, and their industries.

THE HERB CHAMBERS COMPANIES

NOTES TO COMBINED FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2024 AND 2023

Note 4 - Accounts Receivable (Continued)

Accounts receivable consisted of the following at December 31, 2024 and 2023:

A roll forward of the allowance for credit losses is as follows at December 31, 2024 and 2023:

THE HERB CHAMBERS COMPANIES

NOTES TO COMBINED FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2024 AND 2023

Note 5 - Inventories And Floorplan Notes Payable

Inventories consisted of the following at December 31, 2024 and 2023:

Inventories

If the first-in, first-out (FIFO) method of inventory valuation on new vehicles had been used, inventory would have been higher by approximately $30,000,000 and $27,700,000 at December 31, 2024 and 2023, respectively, and net income would have increased by approximately $2,300,000 and $2,200,000 for the years ended December 31, 2024 and 2023, respectively.

Floorplan Notes Payable

The Group has floorplan agreements with Bank of America, N.A., Mercedes-Benz Financial Services USA LLC, Toyota Motor Credit Corporation, Ford Motor Credit Company, and Wells Fargo Bank, N.A. for new, used, lease and rental vehicle financing. The notes are collateralized by all of the business assets of the respective dealerships, all of the products and proceeds thereof. The Mercedes-Benz Financial Services USA LLC, Toyota Motor Credit Corporation, Ford Motor Credit Company, and Wells Fargo Bank, N.A. have the personal guarantee of the Group’s owner. The notes are due when the vehicles are sold. Floorplan notes payable on vehicles have variable interest rates. four agreements with interest based on SOFR rates (4.60% and 5.38% at December 31, 2024 and 2023, respectively) plus 1.0% to 1.7% and one floorplan agreement with interest based on the prime rate (7.5% to 8.50% at December 31, 2024 and 2023, respectively) plus 1.50%. Prior to February 14, 2024, the Group had one floorplan agreement based on BSBY plus 1.00%, which was converted to SOFR rate plus 1.0%.

THE HERB CHAMBERS COMPANIES

NOTES TO COMBINED FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2024 AND 2023

Note 5 - Inventories And Floorplan Notes Payable (Continued)

Floorplan Notes Payable (Continued)

The floorplan notes payable agreement with one of the banks is cross-defaulted with other loans from the bank to other entities of the Group and to related real estate entities that are 100% owned by the owner of the Group. These floorplan agreements are guaranteed by the members of the Group and the owner of the Group. The loan agreement contains various financial covenants. At December 31, 2024, the Group was in compliance with the financial covenants.

The Group also has loaner and rental vehicle notes payable agreements with BMW North America, Inc. (BMW) and Porsche Financial Services, Inc. for loaner and rental vehicle financing for certain dealerships. The BMW loaner and rental vehicle notes payable agreement has variable interest rates determined monthly based on the prime rate (7.5% and 8.5% at December 31, 2024 and 2023, respectively) less .25%. Lease and rental vehicle notes payable are collateralized by specific vehicles.

At December 31, 2024 and 2023, the Group had a maximum credit available under the various vehicle financing agreements of $533,410,000 and $545,910,000, of which $453,101,482 and $403,802,001, respectively, was outstanding. Financing sources provide temporary increases to accommodate fluctuations in units being delivered from the manufacturer.

Total interest expense on floorplan notes payable amounted to approximately $22,529,000 and $15,130,000 for the years ended December 31, 2024 and 2023, respectively.

THE HERB CHAMBERS COMPANIES

NOTES TO COMBINED FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2024 AND 2023

Note 6 - Net Property And Equipment

Net property and equipment consisted of the following at December 31, 2024 and 2023:

Depreciation and amortization expense for the years ended December 31, 2024 and 2023 was $8,326,722 and $7,328,638, respectively.

Note 7 - Accounts Payable And Other Accrued Expenses

Accounts payable and other accrued expenses consisted of the following at December 31, 2024 and 2023:

THE HERB CHAMBERS COMPANIES

NOTES TO COMBINED FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2024 AND 2023

Note 8 - Lines Of Credit

The Group has a $7,000,000 revolving line of credit with Toyota Motor Credit Corporation. The credit facility expires on May 31, 2026, with interest payable at Prime minus .49%. The Group has a $10,000,000 revolving credit facility with Bank of America, N.A. The credit facility expires on October 31, 2025, with interest payable at SOFR plus 1.50%. The Group has a $ 5,000,000 revolving credit facility with Wells Fargo Bank, N.A. The credit facility expires on August 31, 2025, with interest payable at SOFR plus 1.10%. The above lines of credit are guaranteed by various dealerships who are included in the respective bank’s floorplan notes payable agreements.

The Group has an additional $10,000,000 line of credit with Wells Fargo Bank, N.A. The credit facility expires on August 31, 2025, with interest payable at SOFR plus 1.25%. The line of credit is guaranteed by two operating entities in the Group, together with the owner.

No borrowings under the lines of credits were outstanding at December 31, 2024 and 2023.

Note 9 - Leases

Right Of Use Assets And Operating Lease Liabilities

The Group leases land and facilities related to dealership operations. The property leases are generally from affiliated companies related by common ownership and management for an initial period of 5 years and are typically structured to include renewal options. The Group has included renewal options that they are reasonably certain to exercise in the measurement of lease liabilities and right-of-use assets. The Group also has leases for various storage and parking locations. Leases expire on various dates through September 2034.

The carrying amount of right of use assets and accumulated amortization as of December 31, 2024 and 2023 are as follows:

THE HERB CHAMBERS COMPANIES

NOTES TO COMBINED FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2024 AND 2023

Note 9 – Leases (Continued)

Right Of Use Assets And Operating Lease Liabilities (Continued)

The right-of-use assets are amortized over the lease terms of the underlying assets which range from one to twelve years, on a straight-line basis. The weighted-average remaining lease term in years for operating leases is 5.91 and the weighted-average discount rate for operating leases is 5.55%. Amortization expense recognized for the years ended December 31, 2024 and 2023 was $37,807,658 and $36,944,643, respectively.

Operating lease liabilities are recognized initially at the present value of the remaining lease payments, discounted using the lessee’s incremental borrowing rate as of January 1, 2022 for existing leases at adoption and for new leases after adoptions, the discounted rate based on the new terms of the new lease.

Operating lease liabilities at December 31, 2024 and 2023, are as follows:

Aggregate future minimum lease maturities under these leases at December 31, 2024 are as follows:

THE HERB CHAMBERS COMPANIES

NOTES TO COMBINED FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2024 AND 2023

Note 9 – Leases (Continued)

Right Of Use Assets And Operating Lease Liabilities (Continued)

The components of operating lease expense for the years ended December 31, 2024 and 2023 included in operating expenses on the accompanying combined statements of operations and comprehensive income is approximately as follows:

The Group subleases portions of its facilities to companies related by common ownership and management as a tenant-at-will. Short-term leases mainly consist of month-to-month leases with unrelated parties for vehicle storage facilities and additional parking.

Financing Lease

The Group has a finance lease for the use of a building located next to one of the dealerships expiring in January 2029, with a five-year renewal option. The lease includes monthly payments of $ 38,446 through January 2024 and monthly payments of $43,831 thereafter. The asset and liability under the financing lease are recorded at the present value of the minimum lease payments. The financing lease asset has been included in net property and equipment at $4,382,518 at December 31, 2024 and 2023. The asset is depreciated over its estimated productive life. Accumulated depreciation for the financing lease asset was $1,856,124 and $1,237,416 at December 31, 2024 and 2023, respectively, and depreciation expense was $618,708 for the years ended December 31, 2024 and 2023. The remaining principal balance of $1,928,496 and $2,333,106 at December 31, 2024 and 2023, respectively, is recorded as financing lease liability, net of $433,122 and $404,611, respectively, which is included in current portion of finance lease liability in the accompanying combined balance sheets.

THE HERB CHAMBERS COMPANIES

NOTES TO COMBINED FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2024 AND 2023

Note 9 – Leases (Continued)

Financing Lease (Continued)

The following is a schedule of the future minimum lease payments under the finance lease and the present value of the net minimum lease payments at December 31, 2024:

Note 10 - Related Party Transactions

Management Agreements

JRM has management agreements with the dealerships owned by Herbert G. Chambers. The agreements are for a one-year term and automatically renew for successive one-year terms unless terminated in advance by the owner. Under these agreements, JRM collects an annual management fee.

The agreements require the dealerships to pay between $35,000 and $58,300 per month. The agreements include services relating to accounting, advertising, banking, controller, data processing and management information service, internet service, employee benefits, financing, factory relationships, human resource, insurance, internal audit, legal, marketing, operations, tax, training and used car management. In addition to the monthly management fees, certain dealerships pay an annual management fee that is computed at year end based on a formula which takes into account income earned by the certain dealerships and a return of invested equity in those dealerships. The proceeds of the annual management fee are used by JRM in calculation and payment of the consulting fee paid to Chambers Consulting Corp., as noted below.

THE HERB CHAMBERS COMPANIES

NOTES TO COMBINED FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2024 AND 2023

Note 10 - Related Party Transactions (Continued)

Management Agreements (Continued)

For the years ended December 31, 2024 and 2023, management fees totaling $100,625,400 and $154,691,000, respectively, are eliminated from sales and operating expenses and have no effect on reported net income on the accompanying combined statements of operations and comprehensive income.

Consulting Agreement

The Group has an annual consulting agreement with Chambers Consulting Corp., a company related through common ownership. The annual fee is to be computed at year end based on a formula which takes into account total fees earned by The Herb Chambers Companies less direct expenses and overhead and profit for services not provided by the Group. The consulting agreement includes services relating to banking, financing, factory relationships, human resources, legal, marketing, tax, strategic planning, and acquisition planning. Total consulting fees for the years ended December 31, 2024 and 2023 are $60,350,000 and $101,450,000, respectively, and are included in operating expenses on the accompanying combined statements of operations and comprehensive income.

Due From (To) Owner

At December 31, 2024 and 2023, the Group had amounts due to or from the owner. These amounts represent unsecured net non-interest bearing advances and borrowings with no specified maturity date. As of December 31, 2024 and 2023, the net combined balance due from owner was $104,936,943 and $64,260,902, respectively, and is classified as an other asset on the accompanying combined balance sheets.

Insurance Program

The Group administers high deductible programs for the workers’ compensation and property and casualty insurance coverage for the dealerships. The policies, which renew annually on October 1, have deductibles ranging from $5,000 to $350,000; premiums cover all claims over the deductibles. At December 31, 2024 and 2023, a $246,000 escrow funded by the Group to pay claims is included in other assets on the accompanying combined balance sheets. The dealerships make payments to JRM to create an insurance loss fund which will be used to replenish the escrow as claims within the deductible amount are paid. Since the Group is not an insurance company, it accounts for these payments, net of related premiums and insurance claims paid, as an insurance loss fund liability with a balance of $3,780,700 and $3,665,575 at December 31, 2024 and 2023, respectively. At December 31, 2024, the insurance policies require the Group to maintain a letter of credit totaling $4,117,000.

THE HERB CHAMBERS COMPANIES

NOTES TO COMBINED FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2024 AND 2023

Note 10 - Related Party Transactions (Continued)

Investment In Partnerships

JRM is the general partner of Avonwood Associates Limited Partnership and Geo Missy Limited Partnership. The Group has elected to account for its one percent ownership in each of the partnerships on the equity method of accounting as it believes that this method best reflects the position of the general partner. Income recorded for these partnerships for the years ended December 31, 2024 and 2023 was $64,952 and $62,774, respectively, and has been classified as other income in the combined statements of operations and comprehensive income.

Guarantee

Two operating entities in the Group, together with the owner, guarantee a $200,000,000 revolving line of credit. At December 31, 2024, the borrowing entities of the line of credit consisted of twenty-five related party real estate entities that the Group leases primary operating facilities from and are owned by the Group’s owner. The line of credit is used primarily for the purchase of operating facilities. The balance outstanding under the line of credit was $80,840,800 at December 31, 2024. The line of credit expires on September 30, 2025; however, management expects they will renew and extend the line of credit prior to September 30, 2025.

Note 11 - Retirement Plan

The Group and its affiliated organizations maintain a 401(k) plan covering all employees who have completed one year of service and attained 18 years of age. Participants may make elective deferrals from 1% to 50% of the participant’s eligible compensation, limited to a maximum annual as set periodically by the Internal Revenue Service. Participants’ contributions are matched by the Group at the rate of 50% up to 4% of the participants’ compensation. For the years ended December 31, 2024 and 2023, contributions were $2,062,153 and $2,063,055, respectively, and is included in operating expenses on the accompanying combined statements of operations and comprehensive income.

THE HERB CHAMBERS COMPANIES

NOTES TO COMBINED FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2024 AND 2023

Note 12 - Supplemental Cash Flows

The following cash and non-cash transactions occurred during the years ended December 31, 2024 and 2023.

Supplemental disclosures of cash flow information:

Supplemental disclosures of non-cash financing and investing activities:

Note 13 - Contingencies and Commitments

The dealerships operated by the Group sell automobiles pursuant to franchise agreements with automobile manufacturers or authorized distributors of the manufacturer. Through the terms and conditions of these franchise agreements, manufacturers can exert considerable influence over the operations of the Group’s dealerships. Each franchise agreement includes provisions for the termination or non-renewal of the manufacturer-dealer relationship for a variety of causes. Under the terms of the franchise agreements, the Group is required to maintain minimum working capital requirements and other specific financial ratios. The loss of a Group’s franchise agreement could have a material adverse effect on the Group’s business, financial condition, and results of operations.

THE HERB CHAMBERS COMPANIES

NOTES TO COMBINED FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2024 AND 2023

Note 13 - Contingencies and Commitments (Continued)

The Group participates in numerous factory incentive and warranty programs. The Group is reimbursed for these incentive and warranty claims based on individual program guidelines and rules. Such reimbursements are subject to audit and retroactive adjustments

The Group is involved in lawsuits in the normal course of business. Management’s assessment is that none of these matters are anticipated to have a material adverse impact on the financial position, results of operations, or cash flows of the Group.

The Group is subject to federal and state environmental regulations, including rules relating to air and water pollution, and the storage and disposal of gasoline, oil and other chemicals and waste. Local, state and federal regulations also affect automobile dealerships’ advertising, sales and service, and financing activities. Management believes that the Group complies with all applicable laws and regulations relating to its business.

A significant portion of the Group’s business involves the sale of vehicles, parts, or vehicles composed of parts that are manufactured outside the United States. As a result, the Group’s operations are subject to customary risks of importing merchandise, including fluctuations in the relative values of currencies, import duties, exchange controls, trade restrictions, work stoppages and general political and socio-economic conditions in foreign countries. The United States or the countries from which the Group’s products are imported may, from time to time, impose new quotas, duties, tariffs, or other restrictions; or adjust presently prevailing quotas, duties, or tariffs, which may affect the Group’s operations and ability to purchase imported vehicles and/or parts at reasonable prices.

On September 10, 2024, the United States Attorney’s Office sent Civil Investigative Demands to eight entities of the Group in connection with its investigation into possible violations of the False Claims Act related to applications submitted for the issuance and forgiveness of Paycheck Protection Program (PPP) loans totaling $7,659,391. The issue concerns whether these entities were eligible for the PPP loans considering an Interim Final Ruling issued by the SBA which limited businesses that are part of a single corporate group to no more than $20,000,000 of PPP loans in the aggregate. Although the Group denies any liability under the False Claims Act or any other law related to this dispute, the Group has agreed to resolve this matter with the United States Attorney’s Office with a settlement payment of $11,841,143, which has been included in accounts payable and other accrued expenses at December 31, 2024 on the accompanying combined balance sheets and as settlement expense included in other income (expenses) on the accompanying combined statements of operations and comprehensive income.

THE HERB CHAMBERS COMPANIES

NOTES TO COMBINED FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2024 AND 2023

Note 14 - Common Stock

Common stock is comprised of the following as of December 31, 2024 and 2023:

THE HERB CHAMBERS COMPANIES

NOTES TO COMBINED FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2024 AND 2023

Note 14 - Common Stock (Continued)

Note 15 – Subsequent Event

On February 14, 2025, the Group entered into a Purchase and Sale Agreement (the “Transaction Agreement”) with Asbury Automotive Group, Inc. (“Asbury”). Pursuant to the Transaction Agreement, the Group is expected to sell substantially all of the assets, including all real property and related businesses of the Herb Chambers Companies (collectively, the “Businesses”) for an aggregate purchase price of approximately $1.34 billion, which includes $590 million for related real estate entities and leasehold improvements. In addition, the Group will sell new vehicles, used vehicles, service loaner vehicles, fixed assets, parts, and supplies for a purchase price to be determined at the closing (the “Closing”) of the transactions set forth in the Transaction Agreement and Asbury will reimburse the Group for certain dealership construction and development costs incurred prior to the Closing. The Businesses includes 33 dealerships, 52 franchises and three collision centers. The Group will retain ownership of the Mercedes-Benz of Boston dealership in Somerville, Massachusetts (Herb Chambers I-93, Inc.). The Groups sale of the Businesses is anticipated to close in the second quarter of 2025 and is subject to various customary closing conditions, including approval from the applicable automotive manufacturers.

THE HERB CHAMBERS COMPANIES

SCHEDULE I – COMBINING BALANCE SHEETS

DECEMBER 31, 2024