**UNITED
      STATES**


**SECURITIES
      AND EXCHANGE COMMISSION**


Washington,
      D.C. 20549





FORM
      10−KSB


(Mark
      One)





**x
      ANNUAL REPORT PURSUANT
      TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
      1934**




For
      the
      fiscal year ended: November
      30, 2005





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





For
      the
      transition period from: __________ to ____________




Commission
      File No.: 000-51437





**BESTWAY
      COACH EXPRESS INC.**


(Exact
      Name of Small Business Issuer as Specified in Its Charter)





NEW
                YORK
              (State
                or other jurisdiction of incorporation or organization)
            13-396-1159
              (I.R.S.
                Employer Identification No.)




2
      Mott
      Street, 7 th Floor,
      New York, New York, 10013


----------------------------------------------------------------------------------------------------------------


(Address
      of Principal Executive Offices)





(212)
      608-8988


-----------------------------------------------------------------------------


(Registrant’s
      Telephone Number, Including Area Code)





SECURITIES
      REGISTERED UNDER SECTION 12(b) OF THE EXCHANGE ACT: NONE





SECURITIES
      REGISTERED UNDER SECTION 12(g) OF THE EXCHANGE ACT: COMMON
      STOCK, PAR VALUE $0.001





Check
      whether the issuer is not required to file reports pursuant to Section 13 or
      Section 15(d) of the Exchange Act. ___





Check
      whether the issuer (1) filed all reports required to be filed by Section 13
      or
      15(d)of the Exchange Act during the past 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 x No
o





Check
      if
      there is no disclosure of delinquent filers in response to Item 405 of
      Regulation S-B contained in this form, and no disclosure will be contained,
      to
      the best of registrant's knowledge, in definitive proxy or information
      statements incorporated by reference in Part III of this Form 10-KSB or any
      amendment to this Form 10-KSB. o





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





State
      issuer's revenues for its most recent fiscal year: $6,612,945




The
      aggregate market value of voting and non-voting common equity held by
      non-affiliates of the registrant as of March 1, 2006 was not
      determinable.




The
      number of shares of the registrant's common stock issued and outstanding as
      of
      March 1, 2006: **** 13,700,000shares
      issued, 13,680,000 outstanding.















INDEX
      TO
      FORM 10-KSB ANNUAL REPORT






**Part
              I**
            
            PageItem
                1.
            Description
                of Business
            3Item
                2.
            Description
                of Property
            9Item
                3.
            Legal
                Proceedings
            9Item
                4.
            Submission
                of Matters to a Vote of Security
                Holders
            9


**Part
      II**


Item
                5.
            Market
                for Common Equity and Related Stockholder
                Matters
            10Item
                6.
            Management's
                Discussion and Analysis of Financial Condition
                and Results of Operations
            12Item
                7.
            Financial
                Statements
            22Item
                8.
            Changes
                in and Disagreements with Accountants on Accounting
                and Financial Disclosure
            22Item
                8A
            Controls
                and Procedures
            22Item
                8B
            Other
                Information
            23


**Part
      III**


Item
                9.
            Directors,
                Executive Officers, Promoters and Control
                Persons; Compliance with  Section
                16(a) of the Exchange Act
            24Item
                10.
            Executive
                Compensation
            25Item
                11.
            Security
                Ownership of Certain Beneficial Owners and
                Management
            27Item
                12.
            Certain
                Relationships and Related
                Transactions
            27Item
                13.
            Exhibits
            28Item
                14.
            Principal
                Accountant Fees and Services
            30Signatures
            32Financial
                Statements
            F-1















**FORWARD-LOOKING
      STATEMENTS**







This
      Form
      10-KSB contains statements that constitute "forward-looking statements." These
      forward-looking statements can be identified by the use of predictive,
      future-tense or forward-looking terminology like "believes," "anticipates,"
      "expects," "estimates," or similar terms. These statements appear in a number
      of
      places in this Form 10-KSB and include statements regarding our intent, belief
      or current expectations and those of our directors or officers with respect
      to,
      among other things:(i) trends affecting our financial condition or results
      of
      operations, (ii) our business and growth strategies, and (iii) our financing
      plans. You are cautioned that any forward-looking statements are not guarantees
      of future performance and involve significant risks and uncertainties, and
      that
      actual results may differ materially from those projected in the forward-looking
      statements as a result of various factors. Factors that could adversely affect
      actual results and performance include, among others, the effect of tourism
      levels on our business, the rising price of insurance, government regulation,
      and technological change and competition. The accompanying information contained
      in this report, including, without limitation, the information set forth under
      the heading "Management’s Discussion and Analysis of Financial Condition and
      Results of Operations - Risk Factors" and "Business" identifies important
      additional factors that could materially adversely affect actual results and
      performance. You are urged to carefully consider these factors. All
      forward-looking statements attributable to us are expressly qualified in their
      entirety by the foregoing cautionary statement.





**PART
      I**





**ITEM
      1. DESCRIPTION OF BUSINESS.**





***Background***





We
      were
      incorporated in New York on August 4, 1997. We are a motorcoach service provider
      with 23 motorcoaches. We currently provide specialized destination route
      services to the Mohegan Sun Resort and Casino in Connecticut and the Tropicana,
      Taj Mahal, Claridge and Trump Marina in Atlantic City, New Jersey, which, for
      the twelve-month period ending November 30, 2005, accounts for approximately
      90%
      of our revenues, charter services to tour and travel agencies, which accounts
      for approximately 10% of our revenues and airport services, sightseeing services
      and other services which accounts for the remaining < 1% of our
      revenues. In February 2006, we launched a new interstate commuter service
      between New York City and Philadelphia. Since this new service was launched
      in
      2006, it made no contribution to our fiscal 2005 earnings.





***Our
      Services***





We
      provide services on both a contracted and per seat basis. For contracted
      services, we arrange a fee for the use of our motorcoaches. In these
      arrangements, the customer contracts the vehicle for use and we are paid a
      rate,
      generally on a daily or per mile basis, that is not dependent on passenger
      load
      factors. In per seat operations, we are paid by each individual customer. Fares
      for these per seat services are usually determined by us and payment is received
      from individual passengers or through an independent commissioned agent.
      Approximately 82% of our services are provided on a contracted basis and less
      than **** 17%
      of
      our services are provided on a per seat basis.







3








Special
      Destination Services





Currently,
      most of our revenues are derived through the provision of specialized
      destination route service, which is comprised of daily scheduled service to
      and
      from casinos in Connecticut and Atlantic City and specified locations in
      Manhattan, Queens and Brooklyn. Tickets are sold through independent agents
      and
      at specified locations. Customers are taken on an "open-door" basis or by
      reservation.





Charter
      and Tour Services





We
      currently provide charter services at a fixed daily rate, based on mileage
      and
      hours of operation. We have informal verbal arrangements with tour agencies
      to
      provide various levels of service and equipment for agent-sponsored and
      organized tours. Under these arrangements, we provide the motorcoach and driver
      at a fixed daily rate.





We
      also
      provide sightseeing services on a scheduled basis at an advertised or published
      price. Typically, customers will make reservations for the tours or can simply
      board on an "open-door" basis at scheduled locations. Payment is made by the
      customer, or through the travel agent or hotel.





Interstate
      Commuter Services





In
      February 2006, we launched our new interstate commuter service. We now provide
      scheduled motorcoach service from a midtown location in New York City near
      Penn
      Station to a location in center city, Philadelphia. Currently, we offer 20
      scheduled runs daily to and from New York and Philadelphia 7 days a week. People
      may either purchase tickets through the internet or at tickets booths located
      at
      both destinations.




Airport
      Service





We
      also
      provide services to and from New York City airports and traveler destinations
      in
      the New York tri-state area.





Sales
      and Marketing





We
      have
      historically conducted limited marketing of our services. The principal means
      of
      marketing charter and tour services has been in telephone directories, through
      direct mail to customers included in our computer data base and on the internet
      through our website.





Our
      specialized destination route services to casinos in Atlantic City and
      Connecticut are promoted by the casinos through the provision of incentives
      to
      passengers, including vouchers for a small amount of cash with which to gamble
      and a meal at the casino, which are included with each motorcoach ticket
      purchased.





Our
      scheduled runs to and from New York and Philadelphia are promoted through
      various marketing channels, including flyers, and through advertising in on-line
      and print media, magazines and college newspapers.





***Operations***







4








Our
      garage depot is located in Brooklyn, New York. On staff at this location are
      7 **** mechanics
      who maintain our motorcoach fleet, 5 office staff, 2 dispatchers and a
      general **** manager.
      Our executive offices are located in New York’s Chinatown. All administrative
      functions are conducted at these executive offices.





Because
      our specialized destination route services involve fixed routes which rarely
      vary, the dispatch function is limited to communicating with drivers by radio
      to
      determine that the motorcoach is in service, the number of passengers embarked
      and whether the motorcoach is on schedule and to deal with any problems in
      route. When necessary, dispatchers can communicate necessary modifications
      in
      schedules to meet customer demand and increase utilization. In most instances,
      we receive bookings for tours and charters well in advance, which enables us
      to
      predict periods during which equipment utilization is likely to be low. When
      this occurs, we more actively solicit charter business in an effort to maintain
      equipment utilization or schedule alternative uses for its equipment,
      particularly during the winter months when tourism declines.





On
      our
      scheduled runs to and from Philadelphia, passengers may purchase tickets at
      ticket booths located in both New York and Philadelphia. In most instances,
      however, we receive bookings in advance via the internet, which enables us
      to
      predict and accommodate passenger load.




Equipment





We
      currently operate 23 motor coaches. Eleven of these motorcoaches are 2005 MCI
      motorcoaches (3 J Model vehicles and 8 DL model vehicles). The remaining twelve
      motorcoaches are 1997, 1998, 2000 and 2001 Van Hool motorcoaches that we
      lease.





Prior
      to
      June 2005 we used only Van Hool motorcoaches. In May 2005 we entered into a
      contract relating to the acquisition of 11 MCI motorcoaches. In June 2005,
      we
      received eleven new MCI motorcoaches and traded in eleven of our older Van
      Hool
      motorcoaches. We expect to trade in the remaining twelve older Van Hool
      Motorcoaches by the end of April 2006. At such time our entire fleet will
      consist of new MCI motorcoaches.





The
      MCI
      motorcoaches have many luxury features that enhance our client’s experience and
      provide for a comfortable and safe ride, including spiral entrance stairways,
      Jacob's® engine brake, anti-lock braking system, projector headlamps, frameless
      windows, fully multiplexed electrical system, air-locking baggage compartments
      and chemical-type lavatories.





We
      believe that the acquisition of new motorcoaches will help us to compete better
      in our market, since we will be able to offer our customers a more comfortable
      luxury ride in a brand new motorcoach.





The
      new
      motorcoaches come with a nontransferable 30 month (unlimited mileage) limited
      warranty from MCI. MCI warrants during the warranty term that each motorcoach,
      subject to specified exceptions, will be free from defects in material and
      workmanship. Following are some of the limitations that apply under the
      warranty:





***Part***
            ***Coverage***Belts
            24
                monthsBrake
                Drums & Shoes
            Not
                coveredBrake
                Rotors & Pads
            Not
                covered






5








Engine
            24
                months, covered only by engine supplierEngine
                Accessories
            24
                months, covered only by engine supplierEntertainment
                system
            Covered
                only by system supplierTransmission
            24
                months, covered only by transmission
                supplier





The
      warranties on our older Van Hool motorcoaches have all expired. We are in the
      process of negotiating the terms of the acquisition of the remaining 12 new
      MCI
      motorcoaches. We expect to take delivery of these new motorcoaches before the
      end of April 2006. The purchase price per coach for these motorcoaches will
      be
      the same as the purchase price per coach of the 11 motorcoaches that we acquired
      in May 2005. However, MCI has indicated that it is not willing to give us the
      same trade-in value for our 12 remaining Van Hool motorcoaches that it gave
      us
      for the 11 Van Hool motorcoaches that we already traded in. We continue to
      negotiate this issue with MCI.





Maintenance





We
      currently have a comprehensive preventive maintenance program for our equipment
      to minimize equipment downtime and prolong equipment life. This program includes
      regular safety checks when a motorcoach returns to our garage, regular oil
      and
      filter changes, lubrication, cooling system checks and wheel alignment on
      average every 6,000 to 12,000 miles, and more extensive maintenance procedures
      at greater intervals. Interiors of motorcoaches are cleaned and exteriors washed
      usually on a daily basis.





Repairs
      and maintenance are performed at our Brooklyn garage facility. This facility
      has
      on location a total of 7 mechanics and other maintenance personnel at March
      1,
      2006. Most maintenance provided by outside facilities results from on-the-road
      breakdowns or involves major engine overhauls, which are performed by the
      dealer.





Employees,
      Drivers and Other Personnel





At
      November 30, 2005, we had approximately 45 full time employees, of whom 30
      were
      drivers and 7 were maintenance personnel. The balance included administrative
      personnel, sales and customer service personnel and dispatchers. We also utilize
      approximately 18 independent contractors to drive our motorcoaches on a regular
      basis.





We
      have
      historically had relatively minimal driver turnover among full-time drivers.
      Safety and dependability of drivers are critical to our operations. Drivers
      are
      required to comply with all applicable Federal, state and driver qualification
      and safety regulations, including hours of service and medical qualifications,
      and to hold a Commercial Driver's License issued in conformity with regulations
      of the Federal Highway Administration (FHWA). Drivers are also subjected to
      drug
      and alcohol testing requirements imposed by the FHWA, including random,
      reasonable suspicion and post-accident testing. Driver applicants are required
      to have significant driving experience and to pass medical examinations.





No
      unions
      currently represent any of our employees and we are not a party to any
      collective bargaining agreements. We have not experienced any work stoppages
      and
      believe that relationships with our employees are satisfactory.





Safety





We
      are
      dedicated to maintaining safe operations. We adhere to the FHWA and comparable
      state motor carrier safety rules, including rules concerning safe motor vehicle
      equipment, driver qualifications and safe operation of vehicles. Our drivers
      undergo regular drug and alcohol testing in conformity with FHWA and comparable
      state requirements. We also address accidents and other incidents and take
      follow-up steps intended to reduce the risk of repeat accidents and
      incidents.







6








Risk
      Management and Insurance





The
      primary risks involved in our operations are bodily injury, property damage
      and
      workers' compensation. We currently maintain insurance against these risks
      and
      we are subject to liability as self insurers to the extent of the deductible
      under each policy.





We
      currently maintain liability insurance for bodily injury and third party
      property damage in sufficient amounts to meet all applicable Federal
      requirements. Our workers' compensation policy complies with New York State
      law.





Fuel
      Availability and Cost





Fuel
      prices are subject to sudden increases as a result of variations in supply
      levels and demand. Any sustained increase in fuel prices could adversely affect
      our results of operations due to the resulting increase in our operating costs.
      From time to time, there are efforts at the Federal or state level to increase
      fuel or highway use taxes, which, if enacted, also could adversely affect our
      results of operations.





Competition





The
      portions of the motorcoach industry in which we operate are highly competitive,
      fragmented and served by numerous operators, most of which serve only a single
      area or region. Our competitors include Lotus Tours, Skyliner Bus Company and
      Fung Wah Bus Company.





We
      believe that the principal competitive factors in the motorcoach service
      industry are reliability, customer service and price, as well as equipment
      comfort and appearance.





We
      believe that our competitive position is at least equal to that of other
      regional motorcoach service companies that operate with 10 to 30 motorcoaches
      running out of a single depot and better than that of smaller motorcoach service
      companies having less than 10 motorcoaches. Our methods of competition include
      using late model MCI motorcoaches. We believe that our clients find these
      coaches to be more luxurious than other coaches.





We
      believe that we have strategically positioned the pricing for our interstate
      commuter runs between the prices charged by Greyhound, on the higher end, and
      the low-fare Chinatown motorcoaches. We believe that our drop-off locations
      are
      more convenient to most interstate commuters who travel between New York and
      Philadelphia than the drop-off locations of the low-fare Chinatown motorcoaches.
      In most cases, commuters riding the Chinatown motorcoaches must walk up to
      20
      minutes to get to the next closest ground transportation system that they need
      to take in order to arrive at their final destination. Greyhound’s drop-off
      locations are comparable to our own, however, the majority of Greyhound’s runs
      are not nonstop runs, which result in significant delays for commuters. We
      are
      currently running an express service to 31 st Street
      in Manhattan near Penn Station. Management believes our passengers find our
      locations and nonstop service to be more convenient than those of our
      competitors.







7







Regulation





The
      United States Secretary of Transportation and three agencies within the United
      States Department of Transportation (the Surface Transportation Board, the
      Federal Highway Administration, and the Federal Transit Administration)
      regulate, to a limited extent, our interstate motorcoach operations. The Federal
      Highway Administration, or FHWA, requires our interstate motorcoach operators
      to
      register with that agency, to maintain minimum amounts of insurance and to
      operate in conformity with safety regulations. One or more of the regulatory
      bodies listed above requires our interstate motorcoach operators to adhere
      to
      driver qualification guidelines, to provide transportation service on reasonable
      request and to provide safe and adequate service and vehicles; however, none
      of
      the regulatory bodies regulates our interstate motorcoach fares, nor do they
      require our interstate motorcoach operators to file tariffs. The Surface
      Transportation Board, or STB, and the FHWA can impose civil penalties upon
      us
      for violations of applicable regulatory requirements; the FHWA may suspend,
      amend or revoke our motorcoach operator's registration for our operator's
      substantial failure to comply with applicable regulations. We believe that
      we
      have conducted our operations in substantial compliance with applicable
      regulations, and we do not believe that ongoing compliance with such regulations
      will require us to make substantial capital expenditures.





Federal
      regulatory authority preempts state and local governments from regulating the
      scheduling or rates of interstate or intrastate transportation provided by
      motorcoach operators on interstate routes. State and local regulation of
      interstate and intrastate charter motorcoach transportation is also preempted.





Environmental
      Matters





Our
      operations are subject to various Federal, state and local environmental laws
      and regulations governing vehicle emissions, aboveground fuel tanks and the
      storage, use and disposal of hazardous materials and hazardous waste in
      connection with our in-house maintenance operations. These laws include the
      Water Pollution Control Act, the Clean Air Act, the Resource Conservation and
      Recovery Act, the Comprehensive Environmental Response, Compensation and
      Liability Act and various state and local laws. There is a 6,000 gallon above
      ground storage tank at our Brooklyn garage depot. We also wash our motorcoaches
      at our Brooklyn garage depot and the resulting waste must be disposed of in
      accordance with regulatory requirements. In the event of a spill, we would
      be
      responsible for the cost of the clean-up. Our oil based fluids (motor oil,
      antifreeze, etc.) are removed by a waste oil company at no cost to us. This
      waste oil company refines and resells or otherwise utilizes these
      fluids.





Our
      cost
      of compliance with environmental laws is approximately $3,000 per year
      consisting mostly of fees paid to remove coach lavatory waste.





Dependence
      upon Major Customers





For
      the
      fiscal years ended November 30, 2005 and 2004 we generated approximately
      $4,150,874 and $2,492,200 **** in
      revenues, respectively, from one customer (Mohegan Sun Casino). These revenues
      constituted approximately 63% and 47% **** of
      our
      total revenues for fiscal year 2005 and 2004, respectively. Another customer,
      SGS Travel, contributed $1,025,934 to our revenues in fiscal year 2005 and
      $1,081,293 in fiscal year 2004, which constituted 16% and 21% of our revenues
      in
      such years, respectively. Trump Plaza contributed $585,930 to our revenues
      in
      fiscal year 2005 and $793,522 to our revenues in fiscal year 2004, which
      constituted 9% and 15% of our total revenues in such years, respectively. We
      do
      not have any written agreements with any of these major customers and these
      customers have indicated that they have no intention of entering into written
      agreements with us for our provision of motorcoach services to them. Therefore,
      the provision of services to these customer is provided by us “at will” and the
      customers may decide not to use our services at any time.







8







**ITEM
      2. DESCRIPTION OF PROPERTY.**





Our
      current facilities consist of an administrative office located at 2 Mott Street,
      New York, New York 10012 and a garage depot located at 183 7 th Avenue,
      Brooklyn, New York 11215. Both facilities are leased.





We
      have
      approximately 3,000 square feet of office space at our Mott Street executive
      office. The monthly rental for this space through January 31, 2006 is $3,297.25
      (not including utilities). The lease had a term of nine years and expired on
      February 1, 2006. We are currently leasing the space on a month-to-month
      basis.





We
      have
      approximately 16,000 square feet at our Brooklyn garage. This space is leased
      to
      us under a 6- year lease that terminates on January 31, 2009. Our monthly rental
      rate under this lease is $9,000 per month. This amount increases to $9,500
      per
      month beginning on February 1, 2007. Of the 16,000 square feet, 10,000 square
      feet is used as an indoor parking terminal and for housing our maintenance
      and
      service facility. The remaining 6,000 square feet consists of a wash bay that
      is
      utilized to clean the exterior and interior of our motorcoaches.





We
      lease
      approximately 100 square feet of space located in midtown Manhattan, New York
      that we use as a ticket sales location. We pay a monthly rental of $1,000 for
      this space. The rental amount increases by 5% on an annual basis. This lease
      will expire in 2007.





We
      have
      entered a new sub-lease for approximately 100 square feet of space located
      in
      center city Philadelphia that we use for ticket sales and administrative
      services in connection with our new interstate commuter services to and from
      New
      York City and Philadelphia. We pay a monthly rental equal to 10% of the gross
      sales revenues we actually receive through ticket sales effected at this new
      space. The lease will expire in 2011.





We
      have a
      secondary depot facility located in Bellport, New York that consists of
      approximately 15,000 square feet. We mainly use this facility to park some
      of
      our motorcoaches when they are not in use. We share this facility with other
      motorcoach companies. We are entitled to use this facility under a sublease
      that
      will terminate on October 30, 2008. We pay a monthly rental of $1,500 under
      the
      sublease.





**ITEM
      3. LEGAL PROCEEDINGS.**





There
      is
      no pending litigation by or against us.





**ITEM
      4. SUBMISSION OF MATTERS TO VOTE OF SECURITY
      HOLDERS.**





No
      matters were submitted to our security holders during the fourth fiscal quarter
      of 2005.








9







**PART
      II**





**ITEM
      5. MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER
      MATTERS.**





***Capital
      Stock***





We
      are
      authorized to issue 20,000,000 shares of common stock, $0.001 par value per
      share. As of February 28, 2006, we had 13,700,000 shares issued and 13,680,000
      outstanding.





Holders
      of common stock are entitled to one vote per share on all matters submitted
      to a
      vote of shareholders and to receive dividends when, and if declared by our
      board
      from funds legally available for such purposes. Upon liquidation, holders of
      common stock are entitled to share ratably in any assets available for
      distribution to stockholders after payment of all obligations of Bestway.
      Stockholders do not have cumulative voting rights or preemptive
      rights.





We
      are
      not authorized to issue any classes of stock other than common
      stock.





***Market
      Price.*** **





There
      is
      no trading market for our common stock at present and there has been no trading
      market to date. There is no assurance that a trading market will ever develop
      or, if such a market does develop, that it will continue.





The
      Securities and Exchange Commission has adopted Rule 15g-9 which establishes
      the
      definition of a "penny stock," for purposes relevant to us, as any equity
      security that has a market price of less than $5.00 per share or with an
      exercise price of less than $5.00 per share, subject to specified exceptions.
      For any transaction involving a penny stock, unless exempt, the rules require:





*
            that
                a broker or dealer approve a person's account for transactions in
                penny
                stocks and





*
            the
                broker or dealer receive from the investor a written agreement to
                the
                transaction, setting forth the identity and quantity of the penny
                stock to
                be purchased.





In
      order
      to approve a person's account for transactions in penny stocks, the broker
      or
      dealer must





*
            obtain
                financial information and investment experience and objectives of
                the
                person; and





*
            make
                a reasonable determination that the transactions in penny stocks
                are
                suitable for that person and that person has sufficient knowledge
                and
                experience in financial matters to be capable of evaluating the risks
                of
                transactions in penny stocks.





The
      broker or dealer must also deliver, prior to any transaction in a penny stock,
      a
      disclosure schedule prepared by the Commission relating to the penny stock
      market, which, in highlight form, specifies





*
            the
                basis on which the broker or dealer made the suitability determination;
                and





*
            that
                the broker or dealer received a signed, written agreement from the
                investor prior to the transaction.





Disclosure
      also has to be made about the risks of investing in penny stocks in both public
      offerings and in secondary trading, and about commissions payable to both the
      broker-dealer and the registered representative, current quotations for the
      securities and the rights and remedies available to an investor in cases of
      fraud in penny stock transactions.







10







Finally,
      monthly statements have to be sent disclosing recent price information for
      the
      penny stock held in the account and information on the limited market in penny
      stocks.





***Holders.***





We
      have
      issued an aggregate of 13,680,000 shares of our common stock to 66 people.
      The
      issued and outstanding shares of our common stock were issued in accordance
      with
      the exemptions from registration afforded by Section 4(2) of the Securities
      Act
      of 1933 and Regulation D promulgated under the Securities Act.





***Dividends.***





Dividends,
      if any, will be contingent upon our revenues and earnings, if any, capital
      requirements and financial conditions. The payment of dividends, if any, will
      be
      within the discretion of our Board of Directors. We presently intend to retain
      all earnings, if any, for use in our business operations and accordingly,
      the Board of Directors does not anticipate declaring any dividends for the
      foreseeable future.





***Securities
      Authorized For Issuance under Equity Compensation
      Plans***





We
      do not
      have any equity compensation plans and no shares of our capital stock are
      reserved for issuance pursuant to any equity compensation arrangement. None
      of
      the shares of our common stock are subject to outstanding options or warrants.





***Status
      of Outstanding Common Stock***





Management
      believes that all of the outstanding common stock of Bestway may be sold
      pursuant to the resale exemption provided by Rule 144(k) under the Securities
      Act other than the shares held by our executive officers and directors, which
      are control shares held by an affiliate and, therefore, may not be transferred
      pursuant to Rule 144(k). Management believes that all such outstanding shares
      (other than the aforementioned control shares) are eligible for resale under
      Rule 144(k) because all of such shares were issued and the full purchase price
      for such shares was received by us more than two years ago and none of the
      holders of the shares are affiliates of Bestway.





***Trading
      of Securities in Secondary Market***





Management
      will attempt to cause our common stock to trade on the Over-the-Counter Bulletin
      Board or in the “pink sheets”. To have its securities quoted on the OTC Bulletin
      Board a company must:





(i)
            be
                a company that reports its current financial information to the Securities
                and Exchange Commission, banking regulators or insurance regulators;
                and(ii)
            have
                at least one market maker who completes and files a Form 211 with
                NASD
                Regulation, Inc.








To
      have
      its securities quoted on the pink sheets a company need not be a company that
      reports its current financial information to the Securities and Exchange
      Commission, banking regulators or insurance regulators. A company is only
      required to have a market maker complete and file a Form 211 with NASD
      Regulation, Inc.







11








The
      OTC
      Bulletin Board is a dealer-driven quotation service. Unlike the NASDAQ Stock
      Market, companies cannot directly apply to be quoted on the OTC Bulletin Board,
      only market makers can initiate quotes, and quoted companies do not have to
      meet
      any quantitative financial requirements. Any equity security of a reporting
      company not listed on the NASDAQ Stock Market or on a national securities
      exchange is eligible.





We
      are
      currently eligible to have our securities quoted on the pink sheets and on
      the
      OTC Bulletin Board by a market maker who files the requisite Form 211 with
      NASD
      Regulation, Inc. and completes the Form 211 review process.





***Transfer
      Agent***





Our
      registrar and transfer agent is STALT, Inc., 671 Oak Grove Avenue, Suite C,
      Menlo Park, CA 94025; telephone (650) 321-7111.





***Recent
      Sales of Unregistered Securities***




Except
      as
      specified below, we have not sold any of our securities in a private placement
      transaction or otherwise during the past three years.





In
      June
      2005 we issued Wilson Cheng, our Chairman and CEO, 2,000,000 shares of our
      common stock in exchange for his personal guaranty of $4,046,000 in financing
      that we received from Caterpillar Financial Services Corporation that we
      utilized to acquire 11 new MCI motorcoaches.





The
      board
      of directors met in order to discuss a fair consideration to provide Mr. Cheng
      in connection with his agreement to personally guarantee the approximately
      $4,000,000 in debt incurred by Bestway so that Bestway could acquire the new
      MCI
      motorcoaches and determined that a guaranty fee of 2.5% or $100,000 was
      reasonable. The board then evaluated the financial condition and prospects
      of
      Bestway and determined that each share of Bestway common stock has a fair market
      value of $0.05. Since Bestway has very limited cash on hand, the Board
      determined that it would be in the company’s best interests to pay the guaranty
      fee in stock and, therefore, issued Mr. Cheng 2,000,000 shares. Other than
      the
      foregoing analysis performed by the Board, no valuation report or outside
      appraiser or consultant was used to determine the fair market value of our
      common stock at the date that the shares were issued to the CEO.





Bestway
      relied on the exemption provided by Section 4(2) of the Securities Act in
      issuing the shares to Mr. Cheng without registration.





***Treasury
      Stock***





On
      December 7, 2004, we purchased 20,000 shares of our outstanding common stock
      from one of our shareholders. The shares were valued at $0.10 per share
      resulting in total cost of $2,000, which has been reflected as a reduction
      in
      retained earnings on the consolidated balance sheets.





**ITEM
      6. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
      AND RESULTS OF OPERATIONS.**







12








***Overview***





We
      were
      incorporated in New York on August 4, 1997. Our primary activity is to provide
      motorcoach services on both a contracted and per seat basis. Most of our
      revenues are derived through the provision of specialized destination route
      service, which is comprised of daily scheduled service to and from casinos
      in
      Connecticut and Atlantic City, and specified locations in Manhattan, Queens
      and
      Brooklyn. Tickets are sold through independent agents retained by the casinos
      and at specified locations. Customers are taken on an "open-door" basis or
      by
      reservation. From Monday through Thursday of each week, we have 17 roundtrip
      schedules to and from the Mohegan Sun Casino & Resort in Connecticut and
      destinations around New York City. On Friday through Sunday, we increase the
      number of our roundtrip schedules to the Mohegan Sun to 19. We provide 5
      roundtrip schedules from Monday through Thursday from New York City to the
      following Atlantic City Casinos: Tropicana, Taj Majal, Claridge and Trump
      Marina. We increase the number of roundtrip schedules to these Atlantic City,
      New Jersey casinos to 7 Friday through Sunday. Some of our motorcoaches make
      more than one roundtrip a day to and from the casinos that they
      serve.





During
      the years ended November 30, 2005 and 2004, approximately 10% and 11%,
      respectively, of our business came from providing motorcoaches for use by
      various travel agencies who organized tours to various destinations. We do
      not
      have any long term contracts with these travel agencies and they book our
      motorcoaches for this purpose on an “as needed” basis. We get paid based upon
      the number of motorcoaches provided and the number of hours or mileage for
      which
      the motorcoaches are utilized. The tour business is seasonal with most bookings
      occurring during the summer months.





We
      also
      provide charter services at a fixed daily rate, based on mileage and hours
      of
      operation. We have informal arrangements with tour agencies to provide various
      levels of service and equipment for agent-sponsored and organized tours. Under
      these arrangements, we provide the motorcoach and driver at a fixed daily rate.
      On average, we charter about one motorcoach per day to third parties during
      the
      week and about 2-3 motorcoaches during the weekend.





For
      the
      most part, our special destination services and our charter services are
      provided on a contracted basis and not a per seat basis. Therefore, customer
      load factors generally do not materially affect our ability to generate
      revenues.





In
      February 2006, we launched our new interstate commuter service. We now provide
      scheduled motorcoach service from a midtown location in New York City near
      Penn
      Station to a location in center city, Philadelphia. Currently, we offer 20
      scheduled runs daily to and from New York and Philadelphia 7 days a week.
      Commuters can either purchase tickets at ticket booths located at each
      destination or purchase tickets on line.





During
      the first month of operations, our new interstate commuter services generated
      approximately $35,000 in revenues and incurred approximately $113,000 in
      expenses. We expect the revenues from the interstate commuter services to
      increase and the expenses to decrease until the service is normalized. We
      estimate that our average monthly revenues from this service during fiscal
      year
      2006 will be $190,000 and our average monthly expenses relating to this service
      will be $142,000. Management believes that this new interstate commuter service,
      if ultimately successful, could be a growth area for us. Management plans to
      closely review the contribution to earnings that this service provides to total
      earnings. If the contribution to earnings justifies it, then management may
      expand this service to other cities in the future.





The
      following table sets forth, for the periods presented, data regarding the total
      revenue and source of revenue earned by Bestway.






13






YEAR
                ENDEDNovember
                30, 2005
            
            November
                30, 2004Amount
            
            Percentage
            
            Amount
            
            PercentageCasinos
            
            $
            5,962,937
            
            
            90
            %
            $
            4,661,940
            
            
            89
            %Tours
            
            
            649,208
            
            
            10
            %
            
            555,139
            
            
            11
            %Charter
            
            
            300
            
            
            < 1
            %
            
            4,439
            
            
            < 1
            %Other
            
            
            500
            
            
            < 1
            %
            
            33,149
            
            
            < 1
            %Total
            
            $
            6,612,945
            
            
            100
            %
            $
            5,
                254,667
            
            
            100
            %





***Economic
      and Industry Wide Factors Relevant to Bestway***





Our
      business is seasonal in nature and generally follows the travel industry as
      a
      whole, with peaks during the summer months and the Thanksgiving and Christmas
      holiday periods. As a result, our operating cash flows are also seasonal with
      a
      disproportionate amount of our annual operating cash flows being generated
      during the peak travel periods. The day of the week on which certain holidays
      occur, the length of certain holiday periods, and the date on which certain
      holidays occur within the fiscal quarter, may also affect our quarterly results
      of operations.





One
      industry wide factor that is relevant to our business is that all of our
      customers, including our major customers, are “at will” customers. This means
      that customers can terminate our services at any time and without penalty.
      We
      have no written contracts with any customer.





In
      order
      to retain customers, therefore, we must provide reliable and professional
      service. Management believes that customer retention is due to the following
      factors:





·
            Reputation
                for passenger safety and providing efficient, on-time
                service;·
            Maintaining
                long-standing relationships with the casinos and independent ticket
                agents
                that we serve;·
            The
                preference of casino ticket agencies to maintain continuity of service
                with their current proven contractor rather than risk the uncertainty
                associated with a replacement.








***Material
      Risks, Trends and Uncertainties Affecting Bestway’s
      Business***





One
      of
      the material risks and uncertainties that faces our business is that some of
      the
      material costs of running our business are not fixed costs. The major costs
      that
      are not fixed costs are fuel expense and insurance costs.





Fuel
      is
      one of our most significant operating expenses. Fuel costs are subject to
      significant fluctuations due to economic factors. Fluctuations in the cost
      of
      fuel can have a significant impact on our operations and results of operations.
      Any sustained increase in fuel prices could adversely affect our results of
      operations.







14







In
      order
      to mitigate the rising cost of fuel, since January 2004 we have used a strategy
      of purchasing fuel whenever possible from those states in which we operate
      (Connecticut and New Jersey) where fuel costs are less than our operating base
      (NY). We have not employed any hedging strategies to assist us in mitigating
      the
      rising fuel costs and we have no current intention to do so. We are often able
      to pass on increased fuel expenses to our customers by increasing our rates.
      For
      example, we increased the rates that we charge to one of the casinos that we
      provide services to by 8% during the period from January 2004 to present and
      we
      raised the rates that we charge to two other casinos during the same period
      by
      15 to 28%. However, the market is very competitive and we are not certain that
      we will continue to be able to recoup increased fuel costs by passing them
      on to
      our customers.




Insurance
      costs in the motorcoach industry have increased significantly over the last
      few
      years and it has become increasingly difficult for us to find insurance at
      commercially reasonable rates. Annual rates of $21,000 per motorcoach are
      commonplace. During the past few years, insurers have been abandoning the New
      York market. Our current liability insurance and worker’s compensation insurance
      premiums increased more than 100% over the past few years. We cannot operate
      without insurance. In fiscal year 2005, we paid $720,347 in insurance premiums
      to insure our motorcoaches ($95,650 of which was for policies prepaid through
      various dates in 2006) and $79,052 in insurance premiums for worker’s
      compensation insurance. In 2004, we paid $475,851 in insurance premiums to
      insure our motorcoaches ($95,043 of which was for policies prepaid through
      various dates in 2005) and $75,411 in insurance premiums for worker’s
      compensation insurance. At November 30, 2005 and 2004, we also owed $80,475
      and
      $210,838 for various insurance and worker’s compensation policies. Insurance
      costs continue to increase each year. The increase in insurance costs has
      negatively affected our cash flows. Furthermore, although we were able to obtain
      insurance for 2005, the process for obtaining insurance was prolonged and we
      were rejected by some of the insurance companies that we applied to for
      insurance before being able to ultimately secure insurance.




Another
      trend or uncertainty affecting our business is the current state of the nation’s
      security. The U.S. Department of Homeland Security has implemented the Homeland
      Security Advisory System, which is designed to target our country’s protective
      measures when specific information to a specific sector or geographic region
      is
      received. The system combines threat information with vulnerability assessments
      and provides communications to public safety officials and the public. A
      color-coded threat level system was implemented to communicate with public
      safety officials and the public at-large.  Changes or increases in the
      threat condition has economic, physical, and psychological effects on the nation
      and can significantly affect our operations. We have noticed that our business
      will slow down when a higher alert status is issued by the Department of
      Homeland Security. We have also experienced cancellation of booked tours or
      other engagements as a result of an increase in the alert status issued by
      the
      Department of Homeland Security after a tour or other engagement was booked,
      but
      before the services were provided.





***Cost
      of Sales***





The
      principal elements of the costs of sales are labor, fuel, parts, vehicle
      insurance, equipment lease expense and rent. For the years ended November 30,
      2005 and 2004, costs of sales approximated 83% and 82%, respectively, of total
      revenues. We spent approximately $1,080,651 and $593,000 on fuel in fiscal
      years
      2005 and 2004, respectively.




General
      and administrative expenses include costs associated with our headquarters
      in
      New York City, the Brooklyn terminal where we depot our motorcoaches and
      managerial salaries. In fiscal year 2003 we increased the size of our staff
      in
      our corporate headquarters to accommodate growth. Management believes that
      it
      currently has sufficient staff to support anticipated revenue levels for fiscal
      year 2006 and 2007. We anticipate that the increased general and administrative
      costs will be slightly offset if and when our business grows further and if
      we
      are able to effectively realize economies of scale by (i) spreading the cost
      of
      the administrative staff and facilities over a larger revenue base; and (ii)
      capturing savings in expenses such as vehicle insurance and vehicle parts and
      services.







15








***Operating
      Results For Fiscal Year 2005 Compared To 2004***





The
      following table summarizes the results of our operations during the fiscal
      year
      ended November 30, 2005 and 2004 and provides information regarding the dollar
      and percentage increase or (decrease) from the 2004 fiscal year to the 2005
      fiscal year.





**Line
                Item**
            
            **11/30/05**
            
            **11/30/04**
            
            **Increase
                (Decrease)**
            
            **Percentage
                Increase (Decrease)**Revenues
            
            $
            6,612,945
            
            $
            5,254,667
            
            
            1,358,278
            
            
            25.85
            %Net
                income (loss)
            
            
            (678,955
            )
            
            42,171
            
            
            (721,126
            )
            
            (721,126
            %)Operating
                Expenses
            
            
            5,469,885
            
            
            4,312,411
            
            
            1,157,474
            
            
            26.84
            %General
                and Administrative Expenses
            
            
            780,126
            
            
            509,549
            
            
            270,577
            
            
            53.1
            %Interest
                Expense
            
            
            (558,473
            )
            
            (405,370
            )
            
            153,103
            
            
            37.77
            %Earnings
                (Loss) per common share
            
            
            (.05
            )
            
            0.00
            
            
            (.05
            )
            
            (500
            %)





Total
      revenues increased $1,358,278, or 25.85%, to $6,612,945 in fiscal year 2005
      as
      compared to fiscal year 2004. About $1,269,813 of the total increase in revenues
      was largely due to an increase in revenue from our services to casinos and
      about $88,465 of the increase in revenues resulted from our other destination
      services.





Our
      tour
      revenues increased from $555,139 in fiscal year 2004 to $649,208 in fiscal
      year
      2005. This represents a $94,069 or 16.95% increase in tour generated revenues
      from year to year.





Operating
      expenses increased $1,157,474 or 26.84% to $5,469,885 for 2005 fiscal year
      as
      compared to our 2004 fiscal year. The increase in operating expenses was
      primarily due to increases in the following expenses from fiscal year 2004
      to
      2005:




·
            Increased
                fuel expenses of $487,263, which contributed 42% to the overall
                increase·
            Increased
                payroll of $185,450, which contributed 16% to the overall
                increase·
            Increased
                farm-outs of $134,020, which contributed 12% to the overall
                increase





Fuel
      expenses increased as a result of increased oil prices and increased utilization
      of our motorcoaches. Payroll expenses increased as a result of hiring three
      new
      management support level people and as a result of an overall increase in
      amounts payable to drivers and administrative staff. Our farm-out expense,
      which
      is an expense incurred when we utilize other motorcoach companies on a
      contracted basis to serve our clients when we do not have motorcoaches
      available, increased because of increased overbookings. In addition, insurance
      expense increased as a result of increased premiums, and toll expenses increased
      as a result of increased tolls and increased utilization by our coaches of
      toll
      roads, bridges and tunnels.





General
      and administrative expenses in 2005 increased $270,577 or 53.1%, from $509,549
      in fiscal year 2004 to $780,126 in fiscal year 2005. This was due mainly to
      an
      increase of $212,071 in salaries and related expenses.







16







Interest
      expense increased $153,103 in fiscal year 2005 or 37.77%. This is primarily
      attributable to increasing interest costs associated with leases prior to
      replacing those leases with lower-rate traditional financing.





Net
      income decreased $721,126 in fiscal year 2005 from $42,171 in fiscal year 2004
      compared to ($678,955), and pre-tax income decreased $1,210,339 from the prior
      year. This is due primarily to additional depreciation in connection with a
      change in estimate of the motorcoaches’ useful lives of $376,773, and a loss
      trade-in of several motorcoaches of $581,098.




*Balance
      Sheet Items*




We
      had
      total current assets of $488,867 as of November 30, 2005, of which $7,706 was
      cash. Our total assets as of November 30, 2005 were $6,742,182. We had total
      current liabilities of $3,717,925 as of November 30, 2005. Our total
      stockholders' deficit as of November 30, 2005 was ($1,231,994).




Changes
      in our balance sheet items reflect, among other things, a decrease in insurance
      proceeds receivable of $117,605. This was due to an insurance claim due the
      Company at November 30, 2005 that was not present during the current year.
      The
      $401,295 increase to fixed assets was due mainly to the Company trading in
      some
      of its older motorcoaches under capital lease for some new motorcoaches. This
      transaction was the primary cause of the $1,950,677 reduction in capital lease
      obligation, and $3,847,019 increase to motorcoach financing.





*Cash
      Flows*





The
      following table summarizes the statements of cash flows from the financial
      statements:





Year
                Ended November 30,2005
            
            2004Net
                Cash Provided By (Used In) Operating Activities
            
            $
            576,575
            
            $
            931,442Net
                Cash (Used) Provided By Investing Activities
            
            
            (42,907
            )
            
            278,737Net
                Cash Provided By (Used In) Financing Activities
            
            
            (784,413
            )
            
            (976,634
            )Net
                Increase (decrease) in Cash and Cash Equivalents
            
            
            (250,745
            )
            
            233,545Cash
                and Cash Equivalents - Beginning of Period
            
            
            258,451
            
            
            24,906Cash
                and Cash Equivalents - End of Period
            
            
            7,706
            
            
            258,451





For
      the
      years ended November 30, 2005 and 2004, our operating activities generated
      $576,575 and $931,442 in cash, respectively. This decrease in cash flows
      generated from operations is primarily attributable to us paying down a large
      portion of our accounts payable during the current year.





For
      the
      year ended November 30, 2005,we used $42,907 for investing activities,
      comparable to$278,737 of cash provided by investing activities during the prior
      year.. This decrease in cash provided by investing activities is attributable
      to
      the sale of our subsidiary during the year ended November 30, 2004.





For
      the
      years ended November 30, 2005 and 2004, we used $784,413 and $976,634 of cash,
      respectively. The change in cash flow used in financing is primarily
      attributable to us paying down more of our long-term debt in the prior year
      than
      in the current year.


17





***Liquidity
      and Capital Resources***





As
      of
      November 30, 2005, we had $7,706 in cash and cash equivalents, total current
      assets of $488,867 and a working capital deficit of ($3,229,058). We provided
      $576,575 via operating activities for the year ended November 30, 2005.




We
      acquired 11 new MCI motorcoaches pursuant to a purchase agreement with MCI
      (Motor Coach Industries) that we entered into on May 24, 2005. Pursuant to
      the
      agreement we are required to pay an aggregate purchase price of $4,211,000.
      We
      obtained financing for the purchase of these new motorcoaches through
      Caterpillar Financial Services Corporation. Under the terms of the financing
      arrangement, we paid an aggregate down payment of $165,000 with the trade-in
      allowance given for the old motorcoaches, and we financed the remaining
      $4,046,000.





Under
      the
      terms of the financing arrangement, we are required to make a total of 84
      monthly payments. The payments are in the approximate amount of $56,416 and
      we
      are required to make a final balloon payment. The interest rate is 8.25% per
      annum.





The
      financing provided by Caterpillar Financial Services Corporation is secured
      by a
      first priority lien on the motorcoaches and is personally guaranteed by Wilson
      Cheng, our Chairman, Chief Executive Officer and controlling stockholder. In
      consideration for personally guaranteeing the financing for the acquisition
      of
      the motorcoaches, on June 5, 2005, we issued to Mr. Cheng 2,000,000 shares
      of
      our Common Stock.





The
      carrying value of the first three coaches that were traded in during May 2005
      was $515,223, and the trade-in amount of such coaches, in the aggregate, was
      $401,631. The carrying value of the remaining eight coaches that were traded
      in
      during June 2005 was $1,632,662, and the trade-in amount (including carrying
      value of former capital lease obligations) of such coaches, in the aggregate,
      was $1,165,156 .
      In
      total, the carrying value of the eleven coaches, in the aggregate, was
      $2,147,885, and the trade-in amount of such coaches, in the aggregate, was
      $1,566,787, resulting in the $581,098 loss on trade-in of capitalized leases
      in
      the statement of cash flow on page F-6. We accounted for the transactions as
      capital leases.





Our
      accounts payable and accrued liabilities at November 30, 2004 included $104,459,
      representing interest and penalties on delinquent motorcoach lease payments.
      As
      of November 30, 2005, the majority of
      this
      amount has been repaid . ****





We
      anticipate that revenues generated through our operations during the 2006 fiscal
      year will be sufficient for the next 12 months of our operations even if we
      do
      not raise any additional capital through the private placement of our
      securities, loans from our principal stockholders or otherwise.





In
      order
      to improve our liquidity, we are seeking to reduce our expenses. One way that
      we
      have sought to reduce our expenses is to acquire a new fleet of motorcoaches.
      As
      noted above, in May 2005, we acquired 11 new MCI motorcoaches. The monthly
      principal and interest charges relating to the financing of these new coaches
      is
      approximately the same as the monthly lease payments for the motorcoaches that
      they replaced. The monthly interest charges (for the 11 new motorcoaches, which
      we own) and the monthly lease payments (for the 12 older motorcoaches that
      we
      lease) equal approximately $113,342. Prior to acquiring these new motorcoaches
      our monthly lease payments for all 23 motorcoaches that were then leased by
      us
      were approximately $103,868. So, now one-half of our fleet consists of new
      motorcoaches and we are still paying about the same amount to use our
      motorcoaches that we paid when we had all older motorcoaches. However, our
      expenses will now be lower because the new motorcoaches will require less
      maintenance thereby reducing our maintenance expense. We anticipate that we
      will
      save approximately $200,000 a year on major repairs.


18


In
      addition, in order to further increase our cash flows, we raised the daily
      rate
      payable with respect to our special destination services (i.e., casino line
      runs). During the period from January 2004 through June 2005, we raised our
      rates from $650 to $750 per motorcoach for one of our major clients. During
      the
      period from January 2004 through October 2005, we raised our rates from $600
      to
      $705 per motorcoach for another one of our major clients. Finally, during the
      period from January 2004 through November 2005, we raised our rates from $520
      to
      $635 per motorcoach for a third major client.




We
      have
      also adopted a strategy of using any available cash resulting from our increased
      rates and lower expenses to pay down our long-term debt to reduce our interest
      expense and enhance our balance sheet.





In
      October, 2005, we refinanced $100,000 of credit card debt. We were paying
      interest at rates ranging from 11.5% to 29.5% on the credit card debt and we
      are
      now paying interest at a fixed rate of 6%. We anticipate that this reduced
      interest expense will save us about $10,000 a year.





We
      estimate that in order to breakeven (i.e., have sufficient revenues to cover
      all
      of our expenses) in a given month we need to generate approximately $550,000
      in
      revenues on average or have revenues of $6,600,000 per year. The primary reasons
      for our net loss incurred for the year ended November 30, 2005 were the
      depreciation recorded due to a change in estimate of motorcoach useful lives,
      and a loss recorded on the trade-in of several of our motorcoaches under capital
      lease.





Our
      business is seasonal. During the first and fourth quarters of our fiscal year
      we
      will usually break even or suffer a loss. We believe that business is slower
      in
      these months mostly because of colder weather and lower tourism during this
      period. During our second and third quarters, we usually are more profitable.
      Charter prices increase during this period due to greater demand. For example,
      average prices during first and fourth quarters of 2004 for example were
      $650-$675 per motorcoach. This price increased to an average of $705 to $775
      during the second and third quarters.





Our
      biggest overhead costs are motorcoach payments, insurance, and fuel. When we
      renewed our insurance policy in 2005, we ended up paying about 17% more than
      we
      were paying in 2004. Although fuel prices went down beginning in October 2005,
      fuel prices had increased in the first and second calendar quarters of 2005
      compared to previous periods. ****





***Off
      Balance Sheet Arrangements***





We
      do not
      have any 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 or capital
      expenditures or capital resources that is material to an investor in our
      securities.





***Seasonality***





The
      motorcoach business is subject to seasonal variations in operations. During
      the
      winter months, operating costs are higher due to the cold weather and demand
      for
      motorcoach services is lower, particularly because of a decline in tourism.
      As a
      result, our revenues and results of operations are lower in winter months.




19




***Inflation***





Our
      business, revenues and operating results are not affected in any material way
      by
      inflation.





***Critical
      Accounting Policies***





The
      Securities and Exchange Commission issued Financial Reporting Release No. 60,
      "Cautionary Advice Regarding Disclosure About Critical Accounting Policies"
      suggesting that companies provide additional disclosure and commentary on their
      most critical accounting policies. In Financial Reporting Release No. 60, the
      Securities and Exchange Commission has defined the most critical accounting
      policies as the ones that are most important to the portrayal of a company's
      financial condition and operating results, and require management to make its
      most difficult and subjective judgments, often as a result of the need to make
      estimates of matters that are inherently uncertain. Based on this definition,
      we
      have identified the following significant policies as critical to the
      understanding of our financial statements.




·
            *Goodwill*-
                We adopted the provisions of SFAS No. 142, “Goodwill and Other Intangible
                Assets” (SFAS 142) effective January 1, 2003. Under SFAS 142, goodwill and
                indefinite lived intangible assets are no longer amortized but are
                reviewed annually for impairment or more frequently, if indications
                of
                possible impairment exist. We have performed the requisite transitional
                impairment tests for goodwill as of November 30, 2003. Based on these
                tests, management has determined that goodwill was not impaired,
                but due
                to the sale of the subsidiary during the year ended November 30,
                2004,
                goodwill had been eliminated.·
            *Insurance
                Coverage*-
                We maintain comprehensive vehicle liability, general liability, workers’
                compensation and property insurance to insure our assets and operations,
                with some claims subject to certain deductibles and no deductibles
                for
                other claims. Our management continually evaluates the adequacy of
                our
                insurance and whether a reserve for outstanding claims, not covered
                by our
                present insurance coverage and when certain insurance deductibles
                are not
                met, is warranted.·
            *Significant
                Estimates -*Several
                areas require significant management estimates relating to uncertainties
                for which it is reasonably possible that there will be a material
                change
                in the near term. The more significant areas requiring the use of
                management estimates are related to the valuation of liability reserves
                and the useful lives for amortization and depreciation, as well as
                the
                realization of the tax benefits of net operating
                losses.





***Risk
      Factors***





*You
      should carefully consider the risks described below, which constitute all of
      the
      material risks facing us. If any of the following risks actually occur, our
      business could be harmed. You should also refer to the other information about
      us contained in this Form 10-KSB, including our financial statements and related
      notes.*





**FINANCIAL
      RISKS**





***We
      only have $488,867 in current assets of which only
      $7,706***  ***was
      cash and cash equivalents at November 30, 2005. Our total current liabilities
      as
      at such date were $3,717,925. This means we have a working capital deficit
      of
      $3,229,058. We also have longterm debt of $4,256,251.***





In
      order
      to effectively run our business we will require additional working capital.
      We
      may seek to satisfy our future funding requirements through revenues generated
      through our operations, the proceeds of public or private offerings of our
      securities, or through loans from financial institutions or our controlling
      stockholders. We do not have any immediate plans to effect a private placement
      or public offering of our securities nor do we have any written or verbal
      commitments from any other source of financing. Additional financing may not
      be
      available when needed or on terms acceptable to us. Unavailability of financing
      may result in delays in making capital expenditures that management believes
      are
      necessary to effectively operate our business and compete in our market. To
      the
      extent we raise additional capital by issuing equity securities, your ownership
      interest would be diluted.


20


**BUSINESS
      RISKS**





***Our
      business is subject to seasonal fluctuations, which makes our revenues and
      results of operations vary from season to season.***




The
      motorcoach business is subject to seasonal variations in operations. During
      the
      winter months, operating costs are higher due to the cold weather and demand
      for
      motorcoach services is lower, particularly because of a decline in tourism.
      As a
      result, our revenues and results of operations are lower in winter months.





***Fuel
      is one of our most significant operating expenses. Fuel costs are subject to
      significant fluctuations due to economic factors. Fluctuations in the cost
      of
      fuel can have a significant impact on our operations and results of
      operations.***





Fuel
      is
      one of our most significant operating expenses. Fuel prices are subject to
      sudden increases as a result of variations in supply levels and demand. Any
      sustained increase in fuel prices could adversely affect our results of
      operations. From time to time, there are efforts at the Federal or state level
      to increase fuel or highway use taxes, which, if enacted, also could adversely
      affect our results of operations.





***Insurance
      costs in the motorcoach industry have increased significantly over the last
      few
      years and it has become increasingly difficult for us to find insurance at
      commercially reasonable rates. We cannot operate without
      insurance.***





In
      fiscal
      year 2005, we paid $720,347 in insurance premiums to insure our motorcoaches
      ($95,650 of which was for policies prepaid through various dates in 2006) and
      $79,052 in insurance premiums for worker’s compensation insurance. In 2004 we
      paid $475,851 in insurance premiums to insure our motorcoaches ($95,043 of
      which
      was for policies prepaid through various dates in 2005) and $75,411 in worker’s
      compensation insurance. At November 30, 2005 and 2004, we also owed $80,475
      and
      $210,838 for various insurance and worker’s compensation policies. Insurance
      costs continue to increase each year. The increase in insurance costs has
      negatively affected our cash flows. Furthermore, although we were able to obtain
      insurance for 2005, the process for obtaining insurance was prolonged and we
      were rejected by some of the insurance companies that we applied to for
      insurance before being able to ultimately secure insurance.





We
      are
      self-insured for the deductible amounts under our insurance policies, which
      deductible amount is $25,000 per vehicle, per occurrence. If we were to
      experience a significant increase in the number of claims for which we are
      self-insured or claims in excess of its insurance limits, our results of
      operations and financial condition would be adversely affected.





***As
      a provider of motorcoach services, we are subject to significant regulations.
      Compliance with these regulations requires us to incur operating costs, which
      affect our bottom line.***





Motorcoach
      operators are subject to extensive safety requirements and requirements imposed
      by environmental laws, workplace safety and anti-discrimination laws, including
      the Americans with Disabilities Act. Safety, environmental and vehicle
      accessibility requirements for motorcoach operators have increased in recent
      years, and this trend could continue. The FHWA and state regulatory agencies
      have broad power to suspend, amend or revoke our operating authorizations for
      failure to comply with statutory requirements, including safety and insurance
      requirements. Many states require motorcoach operators to obtain authority
      to
      operate over certain specified intrastate routes, and, in some instances, such
      authority cannot be obtained if another operator already has obtained authority
      to operate on that route. As a result, there may be regulatory constraints
      on
      the expansion of our operations in these states.







21






**CONCENTRATED
        CONTROL RISKS**




***The
      management team voting together has the power to make all major decisions
      regarding the company without the need to get consent from any stockholder
      or
      other person. Wilson Cheng, our Chief Executive Officer and President, is also
      the only person knowledgeable about our business, affairs and history and the
      loss of his services would likely result in the indefinite cessation of our
      operations and the complete failure of our current business
      plan.***





Our
      management team owns, in the aggregate, 64.17% of our outstanding common stock.
      Mr. Cheng, our Chief Executive Officer, owns 61.4% of the outstanding common
      stock; Vivian Cheng, Mr. Cheng’s sister, a director and the Secretary of
      Bestway, owns 1.46% of our outstanding common stock; Kelvin Chan, our Chief
      Operating Officer, owns 0.73% of our outstanding common stock; and Jovi Chen,
      our VP of Sales and Marketing, owns 0.58% of our outstanding common stock.
      Our
      current management team, acting together has the power to make all major
      decisions regarding our affairs, including decisions regarding whether or not
      to
      issue stock and for what consideration, whether or not to sell all or
      substantially all of our assets and for what consideration and whether or not
      to
      authorize more stock for issuance or otherwise amend our charter or bylaws.
      Our
      management team is in a position to elect all of our directors and to dictate
      all of our policies. Currently, none of our directors are independent. All
      of
      our directors are members of our management team.





Furthermore,
      since Mr. Cheng is our founder and currently our Chief Executive Officer, no
      other person affiliated with, or employed by, us has his in depth knowledge
      of
      our day to day operations or institutional knowledge regarding our history
      and
      past affairs. The loss or inability of Mr. Cheng to perform his duties would
      likely result in the indefinite cessation of our operations and the complete
      failure of our current business plan. We
      have
      no key man insurance on the life of Mr.
      Cheng. We anticipate the hiring of new employees in connection with the planned
      expansion of our business. Our future success will depend in significant part
      on
      our ability to hire and retain key technical sales and senior management
      personnel. Competition for such personnel is intense and there can
      be no
      assurance that we will be successful in attracting and retaining such
      personnel.






22






**MARKET
      RISKS**





***There
      is no public market for our common stock, and even if a market develops, it
      will
      likely be thin and subject to manipulation.***





Our
      common stock is not listed on any exchange or quoted on any similar quotation
      service, and there is currently no public market for our common stock. We have
      not taken any steps to enable our common stock to be quoted on the OTC Bulletin
      Board, and can provide no assurance that our common stock will ever be quoted
      on
      any quotation service or that any market for our common stock will ever develop.
      As a result, stockholders may be unable to liquidate their investments, or
      may
      encounter considerable delay in selling shares of our common stock. A trading
      market may not develop in the future, and if one does develop, it may not be
      sustained. If an active trading market does develop, the market price of our
      common stock is likely to be highly volatile due to, among other things, the
      low
      revenue nature of our business and because we are a new public company with
      a
      relatively limited operating history. Further, even if a public market develops,
      the volume of trading in our common stock will presumably be limited and likely
      be dominated by a few individual stockholders. The limited volume, if any,
      will
      make the price of our common stock subject to manipulation by one or more
      stockholders and will significantly limit the number of shares that one can
      purchase or sell in a short period of time.





The
      equity markets have, on occasion, experienced significant price and volume
      fluctuations that have affected the market prices for many companies’ securities
      and that have often been unrelated to the operating performance of these
      companies. Any such fluctuations may adversely affect the market price of our
      common stock, regardless of our actual operating performance. As a result,
      stockholders may be unable to sell their shares, or may be forced to sell them
      at a loss.





***Obtaining
      additional capital through the future sale of common stock and derivative
      securities will result in dilution of stockholder
      interests.***





We
      will
      likely raise additional funds in the future by issuing additional shares of
      common stock or securities such as convertible notes, options, warrants or
      preferred stock that are convertible into common stock. Any such sale of common
      stock or other securities will lead to further dilution of the equity ownership
      of existing holders of our common stock.





***We
      do not intend to pay dividends to our stockholders, so you will not receive
      any
      return on your investment in our company prior to selling your interest in
      Bestway.***





We
      have
      never paid any dividends to our stockholders. We currently intend to retain
      any
      future earnings for funding growth and, therefore, do not expect to pay any
      dividends in the foreseeable future. If we determine that we will pay dividends
      to the holders of our common stock, we cannot assure that such dividends will
      be
      paid on a timely basis. As a result, you will not receive any return on your
      investment prior to selling your shares in our company and, for the other
      reasons discussed in this “Risk Factors” section, you may not receive any return
      on your investment even when you sell your shares in our company.





***A
      significant number of our shares will be eligible for sale and their sale or
      potential sale may depress the market price of our common
      stock.***





Sales
      of
      a significant number of shares of our common stock in the public market could
      harm the market price of our common stock. We have authorized 20,000,000 shares
      of common stock. We have issued 13,700,000 shares of common stock, and currently
      have 13,680,000 shares outstanding, all of which are available for future sale.





As
      additional shares of our common stock become available for resale in the public
      market, the supply of our common stock will increase, which could decrease
      its
      price. Some or all of the shares of common stock may be offered from time to
      time in the open market under Rule 144, and these sales may have a depressive
      effect on the market for our shares of common stock. In general, a person who
      has held restricted shares for a period of one year may, on filing with the
      SEC
      a notification on Form 144, sell into the market common stock in an amount
      equal
      to 1% of the outstanding shares for Bulletin Board Companies. Such sales may
      be
      repeated once each three months, and any of the restricted shares may be sold
      by
      a non-affiliate after they have been held two years.





***The
      SEC’s penny stock rules apply to us. These rules may have the effect of
      decreasing the liquidity of our stock and increasing the transaction cost for
      transactions in our stock.***





The
      SEC
      has adopted rules that regulate broker-dealer practices in connection with
      transactions in "penny stocks". Penny stocks are generally securities with
      a
      price of less than $5.00 per share (other than securities registered on certain
      national securities exchanges or quoted on the NASDAQ system, provided that
      current price and volume information with respect to transactions in such
      securities is provided by the exchange or system). Under these rules,
      broker-dealers participating in transactions in low priced securities must
      first
      deliver a risk disclosure document which describes the risks associated with
      such stocks, the broker-dealer's duties, the customer's rights and remedies,
      and
      certain market and other information, and make a suitability determination
      approving the customer for low priced stock transactions based on the customer's
      financial situation, investment experience and objectives. Broker-dealers must
      also disclose these restrictions in writing to the customer, obtain specific
      written consent of the customers and provide monthly account statements to
      the
      customer. With all these restrictions, the likely effect of designation as
      a low
      priced stock will be to decrease the willingness of broker-dealers to make
      a
      market for the stock, to decrease the liquidity of the stock and to increase
      the
      transaction cost of sales and purchases of such stock compared to other
      securities.







23








**ITEM
      7. FINANCIAL STATEMENTS.**





Our
      consolidated financial statements for the fiscal years ended November 30, 2005
      and 2004, and the reports thereon of Child,
      Van Wagoner & Bradshaw, PLLC (formerly Child, Sullivan &
Company), are
      included in this annual report.





**ITEM
      8. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING
      AND FINANCIAL DISCLOSURE.**





On
      January 2, 2006, our independent auditor, Child, Sullivan & Company, changed
      its accounting practice from a corporation to a professional limited liability
      company named Child,
      Van Wagoner & Bradshaw, PLLC, (the
      PLLC). Because Child,
      Van Wagoner & Bradshaw, PLLC ,
      is
      viewed as a separate legal entity, we were obliged to dismiss Child, Sullivan
      & Company as our independent auditor on January 3, 2006, and to engage Child,
      Van Wagoner & Bradshaw, PLLC, as our
      independent auditor for the fiscal year ending November 30, 2005 and the interim
      periods for 2006. The decision to change our independent auditor was approved
      by
      our Board of Directors.





None
      of
      the reports of Child, Sullivan & Company on our financial statements for
      either of the past two years or subsequent interim period contained an adverse
      opinion or disclaimer of opinion, or was qualified or modified as to
      uncertainty, audit scope or accounting principles.





There
      were no disagreements between us and Child, Sullivan & Company, for either
      of the past two years or subsequent interim period on any matter of accounting
      principles or practices, financial statement disclosure, or auditing scope
      or
      procedure, which, if not resolved to the satisfaction of Child, Sullivan &
Company, would have caused it to make reference to the subject matter of the
      disagreement in connection with its report. No reportable events of the type
      described in item 304(a)(1)(iv)(B) of Regulation S-B occurred during the two
      most recent fiscal years.





We
      provided Child, Sullivan & Company with a copy of this disclosure and
      requested that they furnish the Company with a letter addressed to the
      Commission stating whether Child,
      Sullivan & Company agrees
      or disagrees with the statements by us in a Current Report on Form 8-K and,
      if
      not, stating the respects in which it does not agree. A letter from Child,
      Sullivan & Company to such effect is attached as Exhibit 16.1 to our current
      report on Form 8-K filed with the Securities and Exchange Commission on January
      9, 2006.





During
      our two most recent fiscal years, we have not consulted with Child,
      Van Wagoner & Bradshaw, PLLC, on any
      matter that (i) involved the application of accounting principles to a specific
      completed or contemplated transaction, or the type of audit opinion that might
      be rendered on our financial statements, in each case where written or oral
      advice was provided, that was an important factor considered by us in reaching
      a
      decision as to the accounting, auditing or financial reporting issue; or (ii)
      was either the subject of a disagreement or event, as that term is described
      in
      item 304(a)(1)(iv)(A) of Regulation S-B.






24





**ITEM
        8A. CONTROLS AND PROCEDURES.**
  Within
        90
        days of the filing of this Form 10-KSB, an evaluation was carried out under
        the
        supervision and with the participation of our management, including Wilson
        Cheng, our Chairman, CEO and Treasurer, of the effectiveness of our disclosure
        controls and procedures. Disclosure controls and procedures are procedures
        that
        are designed with the objective of ensuring that information required to
        be
        disclosed in our reports filed under the Securities Exchange Act of 1934,
        such
        as this Form 10-KSB, is recorded, processed, summarized and reported within
        the
        time period specified in the Securities and Exchange Commission’s rules and
        forms. Based on that evaluation, Mr. Cheng concluded that as of November
        30,
        2005, and as of the date that the evaluation of the effectiveness of our
        disclosure controls and procedures was completed, our disclosure controls
        and
        procedures were effective to satisfy the objectives for which they are
        intended.




There
      were no changes in our internal control over financial reporting identified
      in
      connection with the evaluation performed that occurred during the fiscal quarter
      covered by this report that has materially affected or is reasonably likely
      to
      materially affect, our internal control over financial reporting.





**ITEM
      8B. OTHER INFORMATION.**




None.








25







**PART
      III**




**ITEM
      9. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS;
      COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT.**





***Directors
      and Executive Officers of Bestway***





The
      directors and executive officers of Bestway are as follows:





**Name**
            
            **Age**
            
            **Position**Wilson
                Cheng
            
            34
            
            President,
                Treasurer and Chairman of the Board of DirectorsVivian
                Cheng
            
            37
            
            Executive
                Vice President and DirectorKelvin
                Chan
            
            38
            
            Chief
                Operating Officer, General Manager and DirectorJovi
                Chen
            
            29
            
            Vice
                President of Sales and Marketing




*Wilson
      Cheng* is
      Bestway’s founder, Chairman, Chief Executive Officer, President and Treasurer.
      He has served in such capacities since the inception of Bestway in August 1997.
      From 1993 to August 1997, Mr. Cheng was the President of Bestway Tour &
Travel Inc., a travel agency located in New York City.





*Vivian
      Cheng* has
      served as the Executive Vice President and Secretary of Bestway since its
      inception in August 1997. From 1993 to date, Ms. Cheng served as the Vice
      President of Bestway Tour & Travel Inc., a travel agency located in New York
      City. Prior to that, Ms. Cheng served as Tour Marketing Manager of Chinese
      American Travel, Inc., from October 1987 through February 1993.





*Kelvin
      Chan* became
      Bestway’s Chief Operating Officer and General Manager in October 1998. Prior to
      that, Mr. Chan was responsible for development, marketing and management of
      all
      development and sales at D&D Trading Inc., from June 1988 to September 1998.





*Jovi
      Chen* ,
      has
      served as Vice President of Sales and Marketing since Bestway’s inception in
      August 1997. Prior to joining Bestway he served as Tour Manager of Bestway
      Tour
& Travel Inc., from July 1995 to August 1997.





Wilson
      Cheng, our Chairman, President and Treasurer, and Vivian Cheng, our Executive
      Vice President and Director, are siblings.





Except
      for Vivian Cheng, each of the executive officers and directors named above
      devotes 100% of his or her business time to the affairs of Bestway. Ms. Cheng
      devotes approximately 50% of her business time to the affairs of Bestway with
      the remaining 50% of her business time being devoted to the affairs of Bestway
      Tour & Travel, Inc., a travel agency.







26







***Audit
      Committee and Audit Committee Financial Expert***





We
      do not
      currently have an audit committee financial expert, nor do we have an audit
      committee. Our entire board of directors handles the functions that would
      otherwise be handled by an audit committee. We do not currently have the capital
      resources to pay director fees to a qualified independent expert who would
      be
      willing to serve on our board and who would be willing to act as an audit
      committee financial expert. As our business expands and as we appoint others
      to
      our board of directors we expect that we will seek a qualified independent
      expert to become a member of our board of directors. Before retaining any such
      expert our board would make a determination as to whether such person is
      independent.





***Code
      of Ethics***





On
      April
      12, 2005, our board of directors adopted a code of ethics that our principal
      financial officer, principal accounting officer or controller and any person
      who
      may perform similar functions is subject to. Currently Mr. Cheng is our only
      officer subject to the Code of Ethics. If we retain additional officers in
      the
      future to act as our principal financial officer, principal accounting officer,
      controller or persons serving similar functions, they would become subject
      to
      the Code of Ethics. The Code of Ethics does not indicate the consequences of
      a
      breach of the code. If there is a breach, the board of directors would review
      the facts and circumstances surrounding the breach and take action that it
      deems
      appropriate, which action may include dismissal of the employee who breached
      the
      code. Currently, since Mr. Cheng serves as a director and since he is a
      controlling stockholder he is largely responsible for reviewing his own conduct
      under the Code of Ethics and determining what action to take in the event of
      his
      own breach of the Code of Ethics. A copy of the code of ethics appears as an
      exhibit to our registration statement on Form 10-SB, filed with the SEC on
      December 14, 2005.





**ITEM
      10. EXECUTIVE COMPENSATION.**





The
      following table sets forth information concerning all cash and non-cash
      compensation awarded to, earned by or paid to our Chairman and Chief Executive
      Officer, Wilson Cheng. None of our other officers receives aggregate
      compensation equal to or in excess of $100,000.





**Long-Term
                  Compensation****Annual
                  Compensation**
              
              **Awards**
              
              **Payouts****Securities****Other**
              
              
              
              **Under-**
              
              
              
              **All****Annual**
              
              **Restricted**
              
              **lying**
              
              
              
              **Other****Name**
              
              
              
              
              
              
              
              **Comp-**
              
              **Stock**
              
              **Options/**
              
              **LTIP**
              
              **Compen-****And
                    Principal**
              
              
              
              **Salary**
              
              **Bonus**
              
              **ensation**
              
              **Awards**
              
              **SARs**
              
              **Payouts**
              
              **sation****Position**
              
              **Year**
              
              **($)**
              
              **($)**
              
              **($)**
              
              **($)**
              
              **(#)**
              
              **($)**
              
              **($)**Wilson
                  Cheng
              
              
              2005
              
              $
              225,000Chairman
                  and
              
              
              2004
              
              $
              105,000CEO
              
              
              2003
              
              $
              306,500







27







***Compensation
      of Directors***





All
      directors are reimbursed for out-of-pocket expenses in connection with
      attendance at board of director's and/or committee meetings.





***Employment
      Agreements***





All
      of
      our employees, including our executive officers, are employed at will and,
      except for our chairman and CEO, we have not entered into an employment
      agreement with any of our employees.





On
      June
      5, 2005, Mr. Cheng entered into an employment agreement with Bestway. Under
      the
      employment agreement, Mr. Cheng receives a base salary of $225,000 with the
      possibility to receive a bonus of up to 10% of his base salary if Bestway
      achieves positive net income. He receives reimbursement for one-half of the
      premiums for his medical insurance, a company car and gas expense for such
      car,
      and a life insurance policy at aggregate premiums of $900 per year. The
      employment agreement is an at-will employment agreement and Mr. Cheng may be
      terminated at any time without the right to receive any severance.





***Stock
      and Benefit Plans***





No
      retirement, pension, profit sharing, stock option or insurance programs or
      other
      similar programs have been adopted by us for the benefit of our officers,
      directors, employees or consultants.





***Compliance
      with Section 16(a) of the Securities Exchange Act***





Section
      16(a) of the Exchange Act requires our executive officers and directors, and
      any
      person who beneficially own more than ten percent of our equity securities,
      to
      file reports of ownership and changes in ownership with the Securities and
      Exchange Commission. Officers, directors and greater than ten percent
      shareholders are required by SEC regulation to furnish us with copies of all
      Section 16(a) forms they file. Based on our review of the copies of such forms
      received by us, we believe that during the year ended November 30, 2005, all
      such filing requirements applicable to our officers and directors were complied
      with.







28








**ITEM
      11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
      MANAGEMENT.**





The
      following table sets forth, as of November 30, 2005, the number of shares of
      common stock owned of record and beneficially by executive officers, directors
      and persons who hold 5% or more of the outstanding common stock of Bestway.
      Also
      included are the shares held by all executive officers and directors as a
      group.





**Name
                and Address of Beneficial Owner**
            
            **Amount
                and Nature of Beneficial Owner**
            
            **Percent
                of Class**
              **Owned**Xu
                Kexi
              14/D
                De Cheng Building
              1436
                Chang De Road
              Hong
                Kong
            
            
            1,400,000
            
            
            10.23
            %Wilson
                Cheng
              2
                Mott Street
              New
                York, New York 10013
            
            
            8,400,000
            
            
            61.40
            %Vivian
                Cheng
              2
                Mott Street
              New
                York, New York 10013
            
            
            200,000
            
            
            1.46
            %Kelvin
                Chan
              2
                Mott Street
              New
                York, New York 10013
            
            
            100,000
            
            
            0.73
            %Jovi
                Chen
              2
                Mott Street
              New
                York, New York 10013
            
            
            80,000
            
            
            0.58
            %All
                Directors and Officers as
              a
                Group (the last 4 persons named above)
            
            
            8,780,000
            
            
            64.18
            %








**ITEM
      12. CERTAIN RELATIONSHIPS AND RELATED
      TRANSACTIONS.**





During
      fiscal year 2004, there was a $313,911 receivable due from Bestway Tour and
      Travel, a travel agency controlled by Wilson Cheng, our president. This
      liability was assumed by Mr. Cheng during fiscal year 2004. At the time of
      the
      assumption by Mr. Cheng of this liability from Bestway Tour and Travel, we
      owed
      Mr. Cheng $363,962. The assignment, therefore, reduced the outstanding related
      party receivable balance to $0 and the amount due to Mr. Cheng to $50,051.





Mr.
      Cheng
      has made interest free loans to us during fiscal years 2005 and 2004. These
      loans aggregated $45,832 and $50,051 as of November 30, 2005 and 2004,
      respectively. These loans are not evidenced by any written instrument and they
      are therefore deemed payable upon demand. However, Mr. Cheng has delivered
      us a
      written manifestation of his intention not to demand repayment of these amounts
      for at least the next twelve months.







29







In
      June
      2005, the Company issued Mr. Cheng an additional 2,000, 000 shares
      in connection with his
      agreement to personally guaranty the $4,046,000 in debt incurred by the Company
      to acquire 11 new MCI motorcoaches.




The
      Company has entered into several notes payable with various related parties.
      The
      notes are non-interest bearing with no fixed terms of repayment, and are payable
      on demand. The purpose of the notes was to cover lease liabilities and other
      obligations that the Company was unable to meet during the economic downturn
      after the events of September 11, 2001. There were $208,012 and $291,500 in
      notes payable - related parties as of November 30, 2005 and 2004, respectively,
      and $122,600 and $152,900 were paid on notes payable - related parties for
      the
      years ended November 30, 2005 and 2004, respectively.





**ITEM
      13. EXHIBITS**








**Exhibit
                Number**
            **Exhibit
                Description**3.1
            Articles
                of Incorporation [Incorporated by reference to Exhibit 2.1 to the
                Company’s Registration on Form 10-SB filed with the SEC on July 14,
                2005]3.2
            Certificate
                of Amendment to Articles of Incorporation [Incorporated by reference
                to
                Exhibit 2.2 to the Company’s Registration on Form 10-SB filed with the SEC
                on July 14, 2005]3.3
            Bylaws
                [Incorporated by reference to Exhibit 2.3 to the Company’s Registration on
                Form 10-SB filed with the SEC on July 14, 2005]10.1
            Employment
                Agreement, dated July 5, 2005, between the Company and Wilson Cheng.
                [Incorporated by reference to Exhibit 6.1 to the Company’s Registration on
                Form 10-SB filed with the SEC on July 14, 2005]10.2
            Agreement
                to Purchase, dated May 24, 2005, between the Company and Motor Coach
                Industries. [Incorporated by reference to Exhibit 6.2 to the Company’s
                Registration on Form 10-SB filed with the SEC on July 14,
                2005]10.3
            Security
                Agreement and Promissory Note, dated May 24, 2005, by the Company
                in favor
                of Caterpillar Financial Services Corporation. [Incorporated by reference
                to Exhibit 10.3 to the Company’s Registration on Form 10-SB filed with the
                SEC on July 14, 2005]10.4
            Agreement,
                dated February 1, 2004, between the Company and Salvatore Basile,
                as
                amended (for Depot). [Incorporated by reference to Exhibit 10.4 to
                Amendment No. 2 to the Company’s Registration on Form 10-SB filed with the
                SEC on December 14, 2005]10.5
            Sublease,
                dated October 31, 2003, between the Company and Harrison Coach, Int’l.
                (for Secondary Depot). [Incorporated by reference to Exhibit 10.5
                to
                Amendment No. 3 to the Company’s Registration on Form 10-SB filed with the
                SEC on January 25, 2006]






30








10.6
            Agreement
                of Lease, dated as of February 1, 1997, between the Company and Wing
                Ming
                Properties (USA). [Incorporated by reference to Exhibit 10.6 to Amendment
                No. 2 to the Company’s Registration on Form 10-SB filed with the SEC on
                December 14, 2005]10.7
            Master
                Lease Agreement, dated October 6, 1997, between the Company and CIT
                Group/Equipment Financing, Inc. (Bus #1818). [Incorporated by reference
                to
                Exhibit 10.7 to Amendment No. 2 to the Company’s Registration on Form
                10-SB filed with the SEC on December 14, 2005]10.8
            Commercial
                Transportation Lease Agreement, dated September 22, 1997, between
                the
                Company and Geico Corporation d/b/a GC Capital Fleet Services, and
                Lease
                Renewal, dated June 15, 2004, between the Company and General Electric
                Capital Corporation (Buses #1838 and #1848). [Incorporated by reference
                to
                Exhibit 10.8 to Amendment No. 3 to the Company’s Registration on Form
                10-SB filed with the SEC on January 25, 2006]10.9
            Commercial
                Transportation Lease Agreement, dated November 13, 1997, between
                the
                Company and GC Capital Fleet Services (Bus #1878). [Incorporated
                by
                reference to Exhibit 10.9 to Amendment No. 2 to the Company’s Registration
                on Form 10-SB filed with the SEC on December 14, 2005]10.10
            Lease
                Agreement, dated February 21, 1998, between the Company and Debis
                Financial Services, Inc. (Bus #1888). [Incorporated by reference
                to
                Exhibit 10.10 to Amendment No. 2 to the Company’s Registration on Form
                10-SB filed with the SEC on December 14, 2005]10.11
            Commercial
                Transportation Lease Agreement, dated December 10, 1999, between
                the
                Company and Partnership Financial Services, Inc. d/b/a ABC Financial
                Services (Buses #2198 and #3118). [Incorporated by reference to Exhibit
                10.11 to Amendment No. 3 to the Company’s Registration on Form 10-SB filed
                with the SEC on January 25, 2006]10.12
            Master
                Lease Agreement No. 87101, dated June 8, 2001, between the Company
                and
                American Equipment Leasing, a division of EAB Leasing Corp. (Bus
                #3148).
                [Incorporated by reference to Exhibit 10.12 to Amendment No. 2 to
                the
                Company’s Registration on Form 10-SB filed with the SEC on December 14,
                2005]10.13
            Commercial
                Transportation Lease Agreement, dated June 25, 2001, between the
                Company
                and Partnership Financial Services, Inc. d/b/a ABC Financial Services
                (Bus
                #3168). [Incorporated by reference to Exhibit 10.13 to Amendment
                No. 2 to
                the Company’s Registration on Form 10-SB filed with the SEC on December
                14, 2005]10.14
            Operating
                Lease Agreement, dated April 18, 2001, between the Company and ABC
                Bus
                Leasing, Inc. (Bus #3178). [Incorporated by reference to Exhibit
                10.14 to
                Amendment No. 2 to the Company’s Registration on Form 10-SB filed with the
                SEC on December 14, 2005]






31







10.15
              Commercial
                  Transportation Lease Agreement, dated May 8, 2001, between the
                  Company and
                  ABC Bus Leasing, Inc. (Bus #3188). [Incorporated by reference to
                  Exhibit
                  10.15 to Amendment No. 3 to the Company’s Registration on Form 10-SB filed
                  with the SEC on January 25, 2006]10.16
              Master
                  Lease No. 15371, dated June 8, 2001, between the Company and TFC
                  Leasing,
                  Inc. (Bus #3198). [Incorporated by reference to Exhibit 10.15 to
                  Amendment
                  No. 2 to the Company’s Registration on Form 10-SB filed with the SEC on
                  December 14, 2005]10.17
              Lease,
                  dated January 29, 2004, between the Company and Penn Visual, Inc.
                  [Incorporated by reference to Exhibit 10.17 to Amendment No. 2
                  to the
                  Company’s Registration on Form 10-SB filed with the SEC on December 14,
                  2005]10.18
              Philadelphia
                  Sub-Lease, dated January 20, 2006, between the Company and Apex
                  Bus
                  Company.14
              Code
                  of Ethics [Incorporated by reference to Exhibit 12 to Amendment
                  No. 2 to
                  the Company’s Registration on Form 10-SB filed with the SEC on December
                  14, 2005]31
              Rule
                  13a-14(a)/15d-14(a) Certification by the Principal Executive Officer
                  and
                  Principal Financial Officer32
              Section
                  1350 Certifications by the Principal Executive Officer and Principal
                  Financial Officer


________________________________________





**ITEM
      14. PRINCIPAL ACCOUNTANT FEES AND
      SERVICES.**





***Audit
      Fees***





The
      aggregate fees billed for each of the fiscal years ended November 30, 2005
      and
      2004 for professional services rendered by the principal accountant for the
      audit of our annual financial statements and review of the financial statements
      included in our Form 10-KSB or services that are normally provided by the
      accountant in connection with statutory and regulatory filings or engagements
      for those fiscal years were $17,000 and $15,000, respectively.





***Audit-Related
      Fees***





There
      were no fees billed in the fiscal years ended November 30, 2005 and 2004 for
      assurance and related services by the principal accountant that are reasonably
      related to the performance of the audit or review of the registrant’s financial
      statements and are not reported under the paragraph captioned “Audit Fees”
above.







32







***Tax
      Fees***





The
      aggregate fees billed in the fiscal years ended November 30, 2005 and 2004
      for
      professional services rendered by the principal accountant for tax compliance,
      tax advice and tax planning were $0 and $4,050, respectively.





***All
      Other Fees***





There
      were no other fees billed in the fiscal years ended November 30, 2005 and 2004
      for products or services provided by the principal accountant, other than the
      services reported above under other captions of this Item 14.





***Pre-Approval
      Policies and Procedures***





On
      January 3, 2006, our board of directors adopted resolutions in accordance with
      the Sarbanes-Oxley Act of 2002 requiring pre-approval of all auditing services
      and all audit related, tax or other services not prohibited under Section 10A(g)
      of the Securities Exchange Act of 1934, as amended to be performed for us by
      our
      independent auditors, subject to the de minimus exception described in Section
      10A(i)(1)(B) of the Exchange Act. These resolutions authorized our independent
      auditor to perform audit services required in connection with the annual audit
      relating to the fiscal year ended November 30, 2005 and the quarterly reviews
      for the subsequent fiscal quarters of 2006 through the review for the quarter
      ended August 31, 2006, at which time additional pre-approvals for any additional
      services to be performed by our auditor would be sought from the Board. Our
      board of directors also appointed and authorized  Wilson
      Cheng to grant pre-approvals of other audit, audit-related, tax and other
      services requiring board approval to be performed for us by our independent
      auditor, provided that the designee, following any such pre-approvals,
      thereafter reports the pre-approvals of such services at the next following
      regular meeting of the Board.





The
      percentage of audit-related, tax and other services that were approved by the
      board of directors is zero (-0-).








33







SIGNATURES





In
      accordance with section 13 or 15(d) of the Securities Exchange Act of 1934,
      the
      Registrant caused this Report on Form 10-KSB to be signed on its behalf by
      the
      undersigned, thereto duly authorized individual.




**BESTWAY
              COACH EXPRESS INC**Date: March
              15, 2006
            By:
            /s/ Wilson
              ChengWilson
              ChengPresident
                and CEO




In
      accordance with the Securities Exchange Act of 1934, this report has been signed
      below by the following persons on behalf of the Registrant and in the capacities
      and on the dates indicated.




Signature
              
              Title
              
              Date/s/
                  Wilson Cheng
              
              President,
                  Treasurer and Chairman
              
              March
                  15, 2006Wilson
                Cheng/s/
                  Vivian Cheng
              
              Executive
                  Vice President and
                  Director
              
              March
                  15, 2006Vivian
                  Cheng/s/
                  Kelvin Chan
              
              Chief
                  Operating Officer, General Manager and Director
              
              March
                  15, 2006Kelvin
                Chan/s/
                  Jovi Chen
              
              Vice
                  President of Sales and Marketing
              
              March
                  15, 2006Jovi
                Chen








34








Bestway
      Coach Express Inc.





**FINANCIAL
      STATEMENTS**





November
      30, 2005 and 2004















BESTWAY
      COACH EXPRESS INC.





FINANCIAL
      STATEMENTS





NOVEMBER
      30, 2005 and 2004







I
      N D E
      X







Page
                No.Report
                of Independent Registered Public Accounting
                Firm
            F-2Balance
                SheetsAs
                of November 30, 2005 and 2004
            F-3Statements
                of OperationsFor
                the years ended November 30, 2005 and 2004
            F-4Statements
                of Changes in Stockholders’
                DeficitFor
                the years ended November 30, 2005 and 2004
            F-5Statements
                of Cash FlowsFor
                the years ended November 30, 2005 and
                2004
            F-6Notes
                to the Financial Statements

















REPORT
      OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING
      FIRM





Board
      of
      Directors


Bestway
      Coach Express Inc.


New
      York,
      N.Y.





We
      have
      audited the accompanying balance sheets of Bestway Coach Express Inc. (the
      Company) as of November 30, 2005 and 2004 and the related statements of
      operations, changes in stockholders’ deficit, and cash flows for the years then
      ended. These financial statements are the responsibility of the Company's
      management. Our responsibility is to express an opinion on these financial
      statements based on our audits.





We
      conducted our audits in accordance with the standards of the Public Company
      Accounting Oversight Board (United States). Those standards require that we
      plan
      and perform our audit to obtain reasonable assurance about whether the financial
      statements are free of material misstatement. An audit includes examining,
      on a
      test basis, evidence supporting the amounts and disclosures in the financial
      statements. An audit also includes assessing the accounting principles used
      and
      significant estimates made by management, as well as evaluating the overall
      financial statement presentation. We believe that our audits provide a
      reasonable basis for our opinion.





In
      our
      opinion, the financial statements referred to above present fairly, in all material
      respects, the financial position of Bestway Coach Express Inc. as of
      November 30, 2005
      and 2004, and the results of its operations, changes in stockholders’ deficit,
      and its cash flows for the years then ended, in conformity with accounting
      principles generally accepted in the United States of America.







Child,
      Van Wagoner & Bradshaw, PLLC


Kaysville,
      Utah


February
      8, 2006







F-2







BESTWAY
      COACH EXPRESS INC.




BALANCE
      SHEETS






November
                30,2
                0
                0 5
            
            2
                0
                0 4AssetsCurrent
                assetsCash
                and cash equivalents
            
            $
            7,706
            
            $
            258,451Trade
                accounts receivable, net (Note 4)
            
            
            177,453
            
            
            246,985Fuel
                tax receivable
            
            
            80,158
            
            
            102,376Insurance
                proceeds receivable
            
            
            -
            
            
            117,605Inventories
                (Note 5)
            
            
            122,080
            
            
            119,046Prepaid
                expenses
            
            
            101,470
            
            
            99,880Total
                current assets
            
            
            488,867
            
            
            944,343Property
                and equipment (Note 6)Total
                property and equipment
            
            
            8,848,737
            
            
            8,447,442Less:
                accumulated depreciation and amortization
            
            
            (2,603,380
            )
            
            (3,409,868
            )Property
                and equipment, net
            
            
            6,245,357
            
            
            5,037,574Other
                assetsDeposits
                and other assets
            
            
            7,958
            
            
            32,152Total
                other assets
            
            
            7,958
            
            
            32,152Total
                assets
            
            $
            6,742,182
            
            $
            6,014,069Liabilities
                and Stockholders’ DeficitCurrent
                liabilitiesChecks
                drawn in excess of bank balance
            
            $
            35,799
            
            $
            9,095Current
                portion of notes payable - banks (Note 13)
            
            
            73,250
            
            
            59,785Current
                portion - motorcoach financing (Note 13)
            
            
            697,294
            
            
            -Current
                maturities of capitalized lease obligations (Note 7)
            
            
            708,238
            
            
            1,284,282Notes
                payable - related parties (Note 8)
            
            
            208,012
            
            
            291,500Payable
                to banks and credit card companies (Note 12)
            
            
            294,746
            
            
            284,774Accounts
                payable
            
            
            236,825
            
            
            459,721Payroll
                taxes payable
            
            
            312,830
            
            
            179,534Accrued
                expenses
            
            
            217,081
            
            
            263,340Customer
                deposits
            
            
            1,850
            
            
            39,665Accrued
                salaries - officers
            
            
            932,000
            
            
            863,728Total
                current liabilities
            
            
            3,717,925
            
            
            3,735,424Long-term
                liabilities, less current maturitiesCapitalized
                lease obligations, net of current maturitiesand
                refinance costs (Note 7)
            
            
            704,595
            
            
            2,079,228Notes
                payable - banks (Note 13)
            
            
            279,662
            
            
            257,593Motorcoach
                  financing, net of current maturities anddeferred guarantee costs
                  (Note 13)
            
            
            3,149,725
            
            
            -Due
                to stockholders (Note 8)
            
            
            45,832
            
            
            57,495Deferred
                income taxes
            
            
            76,437
            
            
            535,
                368Total
                long-term liabilities
            
            
            4,256,251
            
            
            2,929,684Total
                liabilities
            
            
            7,974,176
            
            
            6,665,108Commitments
                and contingencies (Note 15)
            
            
            -
            
            
            -Stockholders’
                deficitCommon
                  stock, $.001 par value**,**20,000,000
                  shares authorized,13,700,000
                  shares issued and 13,680,000 outstanding in2005, 11,700,000 issued
                  and outstanding in 2004
            
            
            13,700
            
            
            11,700Additional
                paid-in-capital
            
            
            625,800
            
            
            527,800Retained
                deficit
            
            
            (1,869,494
            )
            
            (1,190,539
            )Total
                paid-in capital and retained deficit
            
            
            (1,229,994
            )
            
            (651,039
            )Less
                  cost of treasury stock (20,000 and 0 shares,respectively) (Note
                  20)
            
            
            (2,000
            )
            
            -Total
                stockholders' deficit
            
            
            (1,231,994
            )
            
            (651,039
            )Total
                liabilities and stockholders’ deficit
            
            $
            6,742,182
            
            $
            6,014,069





The
      accompanying notes are an integral part of the financial statements







F-3







BESTWAY
      COACH EXPRESS INC.





STATEMENTS
      OF OPERATIONS




For
                  the Years Ended
                November
                  30,2
                  0
                  0 5
              
              2
                  0
                  0 4Revenues
              
              $
              6,612,945
              
              $
              5,254,667Operating
                  expenses
              
              
              5,469,885
              
              
              4,312,411Loss
                  on trade-in of assets under capital lease (Note 13)
              
              
              581,098
              
              
              -Motorcoach
                  depreciation attributable to change in estimate (Notes 6 &
                  18)
              
              
              376,773
              
              
              -Gross
                  profit
              
              
              185,189
              
              
              942,256General
                  and administrative expenses
              
              
              780,126
              
              
              509,549Income
                  (loss) from operations
              
              
              (594,937
              )
              
              432,707Other
                  income (expense)Interest
                  income
              
              
              8,059
              
              
              8,024Other
                  income
              
              
              7,465
              
              
              16,014Gain
                  on sale of subsidiary
              
              
              -
              
              
              21,078Interest
                  expense
              
              
              (558,473
              )
              
              (405,370
              )Total
                  other income (expense)
              
              
              (542,949
              )
              
              (360,254
              )Income
                  (loss) before provision for taxes
              
              
              (1,137,886
              )
              
              72,453Provision
                  for income tax (expense) benefit
              
              
              458,931
              
              
              (30,282
              )Net
                  income (loss)
              
              $
              (678,955
              )
              $
              42,171Income
                  (loss) per share - basic and diluted
              
              $
              (.05
              )
              $
              .00Weighted
                  average number of shares used todetermine
                  loss per share
              
              
              12,700,000
              
              
              11,700,000








The
      accompanying notes are an integral part of the financial
      statements.







F-4







BESTWAY
      COACH EXPRESS INC.





STATEMENTS
      OF CHANGES IN STOCKHOLDERS’
(DEFICIT)





For
      the
      Years Ended November 30, 2005 and 2004








Total
            
            
            
            
            
            
            
            AdditionalCommon
                Stock
            
            Paid-In
            
            Treasury
            
            Retained
            
            Stockholders’Shares
            
            Amount
            
            Capital
            
            Stock
            
            (Deficit)
            
            (Deficit)Balance
                at November 30, 2003
            
            
            11,700,000
            
            $
            11,700
            
            $
            527,800
            
            $
            -
            
            $
            (1,232,710
            )
            $
            (693,210
            )Net
                income
            
            
            –
            
            
            –
            
            
            –
            
            
            –
            
            
            42,171
            
            
            42,171Balance
                at November 30, 2004
            
            
            11,700,000
            
            
            11,700
            
            
            527,800
            
            
            –
            
            
            (1,190,539
            )
            
            (651,039
            )Treasury
                stock
            
            
            (20,000
            )
            
            –
            
            
            –
            
            
            (2,000
            )
            
            –
            
            
            (2,000
            )Issuance
                of common stock
            
            
            2,000,000
            
            
            2,000
            
            
            98,000
            
            
            –
            
            
            –
            
            
            100,000Net
                loss
            
            
            –
            
            
            –
            
            
            –
            
            
            –
            
            
            (678,955
            )
            
            (678,955
            )Balance
                at November 30, 2005
            
            
            13,680,000
            
            $
            13,700
            
            $
            625,800
            
            $
            (2,000
            )
            $
            (1,869,494
            )
            $
            (1,231,994
            )








The
      accompanying notes are an integral part of the financial
      statements.







F-5








BESTWAY
      COACH EXPRESS INC.





STATEMENTS
      OF CASH FLOWS







For
                the Years EndedNovember
                30,2005
            
            2004Cash
                flows from operating activities:Net
                income (loss)
            
            $
            (678,955
            )
            $
            42,171Adjustment
                  to reconcile net income to net cashprovided by operating
                  activities:Depreciation
                and amortization
            
            
            898,240
            
            
            549,683Amortization
                of refinance costs and deferred guarantee
            
            
            93,378
            
            
            -Deferred
                income tax provision
            
            
            (458,931
            )
            
            30,282Gain
                on sale of subsidiary
            
            
            -
            
            
            (21,078
            )Loss
                on trade in of assets under capital lease
            
            
            581,098
            
            
            -Changes
                in operating assets and liabilities:Trade
                accounts receivable, net
            
            
            69,532
            
            
            22,491Fuel
                tax receivable
            
            
            22,218
            
            
            135,902Insurance
                proceeds receivable
            
            
            117,605
            
            
            (117,605
            )Inventories
            
            
            (3,034
            )
            
            (14,403
            )Prepaid
                expenses
            
            
            6,660
            
            
            (35,631
            )Deposits
                and other assets
            
            
            24,194
            
            
            10,667Accounts
                payable
            
            
            (222,896
            )
            
            (34,871
            )Payroll
                taxes payable
            
            
            133,296
            
            
            179,534Payable
                to banks and credit card companies
            
            
            9,972
            
            
            -Accrued
                expenses
            
            
            (46,259
            )
            
            58,077Customer
                deposits
            
            
            (37,815
            )
            
            32,635Accrued
                salaries - officers
            
            
            68,272
            
            
            93,588Net
                cash provided by operating activities
            
            
            576,575
            
            
            931,442Cash
                flows from investing activities:Additional
                expended for acquisition of subsidiary prior to sale
            
            
            -
            
            
            (14,603
            )Purchase
                of property and equipment
            
            
            (42,907
            )
            
            (81,660
            )Proceeds
                from sale of subsidiary
            
            
            -
            
            
            375,000Net
                cash provided by investing activities
            
            
            (42,907
            )
            
            278,737Cash
                flows from financing activities:Checks
                drawn in excess of bank balance
            
            
            26,704
            
            
            (5,945
            )Proceeds
                from notes payable - banks
            
            
            100,000
            
            
            114,884Principle
                payments on note payable - banks
            
            
            (64,466
            )
            
            (61,273
            )Principle
                payments on motorcoach financing
            
            
            (106,123
            )
            
            -Proceeds
                from notes payable - related parties
            
            
            187,432
            
            
            -Payment
                of notes payable - related parties
            
            
            (270,920
            )
            
            (152,900
            )Proceeds
                from due to stockholder
            
            
            112,409
            
            
            -Payment
                of due to stockholder
            
            
            (124,072
            )
            
            (49,761
            )Purchase
                of treasury stock
            
            
            (2,000
            )
            
            -Credit
                on trade-in of capital leases
            
            
            113,651
            
            
            -Repayment
                of capitalized lease obligations
            
            
            (757,028
            )
            
            (821,639
            )Net
                cash used in financing activities
            
            
            (784,413
            )
            
            (976,634
            )








The
      accompanying notes are an integral part of the financial
      statements.







F-6







BESTWAY
      COACH EXPRESS INC.





STATEMENTS
      OF CASH FLOWS (CONT’D)





Net
                increase (decrease) in cash and cash equivalents
            
            
            (250,745
            )
            
            233,545Cash
                and cash equivalents - beginning of year
            
            
            258,451
            
            
            24,906Cash
                and cash equivalents****-
                end of year
            
            $
            7,706
            
            $
            258,451**Supplemental
                Information:**Cash
                paid for interest
            
            **$**
            417,798
            
            $
            399,310Cash
                paid for income taxes
            
            $
            -
            
            $
            -




**Summary
      of non-cash investing and financing activities:**




During
      fiscal year 2004, the Company’s President assumed a liability from a related
      party who owed the Company $313,911. At the time of the assignment, the Company
      owed its President $363,962. The assignment, therefore, reduced the outstanding
      related party receivable balance to $0 and the amount due to the Company’s
      President to $50,051.




During
                the year ended November 30, 2005, the Company traded 11 motorcoaches
                with
                a net book value of $2,147,885 toward the purchase of 11 new motorcoaches.
                The Company received cancellation of capital lease obligations in
                the
                amount of $1,279,886, a trade-in allowance of $165,000, and cash
                and parts
                credit of $121,901, resulting in a loss on trade-in of $581,098.
                The
                Company used the trade-in allowance and a new loan of $4,046,000
                to
                purchase 11 motorcoaches valued at $4,211,000.
              
              On
                June 5, 2005, the Company issued 2,000,000 shares of common stock
                to its
                President, in exchange for his personal guaranty of the $4,046,000
                loan.
                The shares were valued at $.05 per share at June 5, 2005, resulting
                in a
                transaction value of $100,000.








The
      accompanying notes are an integral part of the financial
      statements.







F-7
 BESTWAY
              COACH EXPRESS INC.
 NOTES
              TO FINANCIAL STATEMENTS
 NOVEMBER
            30, 2005 AND 2004








1.
            BASIS
                OF CONSOLIDATION, ORGANIZATION AND
                BUSINESS





Bestway
      Coach Express Inc. (the “Company”) was incorporated on August 4, 1997, in New
      York State. The Company provides motorcoach transportation services. The
      majority of the Company’s revenues is derived from contracts with casinos to
      provide transportation services between Atlantic City, New Jersey, Connecticut,
      and New York City. The Company also provides charter services that are arranged
      by various tour agencies and via direct mail marketing campaigns directed at
      local schools, churches and civic associations.





The
      Company’s operations include a leased terminal and maintenance facility in
      Brooklyn, NY, a leased terminal in Long Island, NY, and a leased administrative
      office in New York City. The Company is subject to regulation by the Department
      of Transportation (the “DOT”) and certain state regulations. The Surface
      Transportation Board and the Federal Highway Administration (the “FHWA”) can
      impose civil penalties upon companies for violations of applicable regulatory
      requirements. The FHWA may suspend, amend or revoke a company’s motorcoach
      operator’s registration for an operator’s substantial failure to comply with
      applicable regulations. Management believes that it has conducted its operations
      in substantial compliance with applicable regulations and does not believe
      that
      ongoing compliance with such regulations will require the Company to make
      substantial capital expenditures.





Of
      the
      Company’s fleet of 23 motorcoaches, 12 are financed via long-term capitalized
      leases for a term of seven years. The Company considers a motorcoach to be
      a
“late model vehicle” during its first seven years of operations. During 2005,
      the Company purchased 11 new motorcoaches, which are financed via a note payable
      with a term of seven years.





The
      accompanying statement of operations for the year ended November 30, 2004
      included the accounts of Amco Transport Holdings, Inc. (“AMCO”), a Delaware
      Corporation, in which the Company owned 73% of the issued and outstanding common
      shares. On November 23, 2004, the Company sold all of its shares of AMCO (see
      note 14).





The
      Company’s current liabilities exceeded its current assets by $3,229,058 and
      $2,791,081 at November
      30, 2005 and 2004, respectively. Continuing losses could endanger
      the Company’s viability as a going concern. However, management anticipates that
      revenues generated in 2006 will provide enough working capital to fund all
      operations for 2006. In addition to increasing rates charged to customers,
      the
      Company has also launched a new service (see Note 21) that is expected to
      dramatically increase revenues. The Company does not expect to incur the same
      non-cash losses in 2006 as it did in 2005, and may defer payment of officers’
salaries and other related party liabilities in order to achieve cash flows
      from
      operations that will sustain the Company through 2006. Repairs and interest
      costs are also expected to decrease as a result of obtaining new
      motorcoaches.





CONTROL
      BY PRINCIPAL STOCKHOLDERS





The
      director, executive officers and other related parties own beneficially, and
      in
      the aggregate, the majority of the voting power of the outstanding shares of
      the
      common stock of the Company. Accordingly, the director, executive officers
      and
      related parties, if they voted their shares uniformly, would have the ability
      to
      control the approval of most corporate actions, including increasing the
      authorized capital stock and the resolution, merger or sale of all of the
      Company’s assets.








F-8
 BESTWAY
              COACH EXPRESS INC.
 NOTES
            TO FINANCIAL STATEMENTS
 NOVEMBER
              30, 2005 AND 2004








2.
            SUMMARY
                OF SIGNIFICANT ACCOUNTING POLICIES





CASH
      AND
      CASH EQUIVALENTS





The
      Company considers all highly liquid investments with an original maturity date
      of three months or less when purchased to be cash equivalents.





INVENTORIES





Inventories
      consist of motorcoach replacement parts and diesel fuel. Inventory cost is
      stated at the lower of cost or market with costs determined using the average
      cost method.





PROPERTY
      AND EQUIPMENT





Property
      and equipment, including capitalized leases, are recorded at cost. Depreciation
      is recorded over the estimated useful lives. The Company principally uses the
      straight-line method of depreciation for financial reporting purposes and
      accelerated methods and useful lives for tax reporting purposes. Maintenance
      costs are expensed as incurred, and renewals and betterments are capitalized.
      The Company’s management continually evaluates whether circumstances have
      occurred that indicate that the remaining estimated useful lives of property
      and
      equipment may warrant revision or that the remaining balance may no longer
      be
      recoverable. Currently, management believes no impairment losses need to be
      recorded based on this evaluation.





CONCENTRATION
      OF CREDIT RISK





The
      Company provides services within New York City, New Jersey and Connecticut
      metropolitan areas. The Company’s accounts receivable consist primarily of
      receivables from casinos and various tour agencies. Management performs ongoing
      credit evaluations on customers and provides allowances for bad debts when
      considered necessary.





REVENUE
      RECOGNITION





Motorcoach
      revenues are derived from fees charged under contracts and other arrangements
      for motorcoach services. Services are provided both on a contracted and per
      seat
      basis. For contracted services, a rate is assessed that is generally on a daily
      or per mile basis, not dependent on passenger load factors. Fares for per seat
      services are usually determined by the Company and payment is received from
      individual passengers or through an independent commissioned agent. Currently,
      most of the Company’s revenues are derived through contracted
      services.





The
      financial statements are prepared based on the accrual method of accounting. The
      Company recognizes revenue when the service is provided. A liability for
      receipts from services sold but not yet earned is recorded as unredeemed
      services and included under the caption “Customer deposits” on the balance
      sheet.





INCOME
      TAXES





Income
      taxes are provided for under the liability method considering the tax effects
      of
      transactions reported in the financial statements, which are different from
      the
      tax return. Deferred income tax assets and liabilities represent the future
      tax
      consequences of those differences, which will be either taxable or deductible
      when the underlying assets or liabilities are recovered or settled.







F-9
 BESTWAY
              COACH EXPRESS INC.
 NOTES
            TO FINANCIAL STATEMENTS
 NOVEMBER
              30, 2005 AND 2004








2.
            SUMMARY
                OF SIGNIFICANT ACCOUNTING POLICIES
                (CONT’D)





EARNINGS
      (LOSS) PER SHARE





Basic
      income (loss) per common share (“EPS”) (“LPS”) is calculated by dividing net
      income (loss) by the weighted average number of common shares outstanding during
      the period. Diluted earnings per share is computed by dividing net income (loss)
      available to common shareholders by the weighted average number of common shares
      and common share equivalents during the periods presented, as long as such
      equivalents are not antidilutive. There were no common share equivalents during
      the periods presented.





INSURANCE
      COVERAGE





The
      Company maintains comprehensive vehicle liability, general liability,
      workers’ compensation and property insurance to insure its assets and operations, with
      some claims subject to certain deductibles and no deductibles for other claims.
      The Company’s management continually evaluates the adequacy of its insurance and
      whether a reserve for outstanding claims, not covered by the Company’s present
      insurance coverage and when certain insurance deductibles are not met, is
      warranted.





CHANGES
      IN PRESENTATION OF COMPARATIVE STATEMENTS





Certain
      accounts were reclassified for the year ended November 30, 2004 to conform
      to
      the year ended November 30, 2005, presentation.





ENVIRONMENTAL
      RESERVES





The
      Company’s operations are subject to various federal, state and local
      environmental laws and regulations governing vehicle emissions, above ground
      fuel tanks and the storage, use and disposal of hazardous materials and
      hazardous waste in connection with its in-house maintenance operations. These
      laws include the Water Pollution Control Act, the Clean Air Act, the Resource
      Conservation and Recovery Act, the Comprehensive Environmental Response,
      Compensation and Liability Act and various state and local laws. The Company
      maintains a 6,000-gallon above-ground storage tank at its Brooklyn garage depot.
      The resulting waste from this tank, as well as any from their motor coaches,
      must be disposed of in accordance with regulatory requirements. In the event
      of
      a spill, the Company would be responsible for the cost of the clean up, which
      could be significant.





The
      Company’s management continually evaluates whether circumstances have occurred
      that indicate that its maintenance facility could be identified for potential
      clean up and/or remediation work. On November 30, 2005 and 2004, management
      determined that there were no existing or pending environmental liabilities.





USE
      OF
      ESTIMATES





The
      preparation of financial statements in conformity with generally accepted
      accounting principles requires management to make estimates and assumptions.
      These estimates and assumptions affect the reported amounts of assets and
      liabilities and disclosure 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 these
      estimates.





F-10
 BESTWAY
              COACH EXPRESS INC.
 NOTES
            TO FINANCIAL STATEMENTS
 NOVEMBER
              30, 2005 AND 2004








2.
            SUMMARY
                OF SIGNIFICANT ACCOUNTING POLICIES
                (CONT’D)





SIGNIFICANT
      ESTIMATES





Several
      areas require significant management estimates relating to uncertainties for
      which it is reasonably possible that there will be a material change in the
      near
      term. The more significant areas requiring the use of management estimates
      are
      related to the valuation of liability reserves and the useful lives for
      amortization and depreciation, as well as the realization of the tax benefits
      of
      net operating losses.





ADVERTISING
      COSTS





All
      costs
      associated with advertising and promoting the Company are expensed in the year
      incurred. Advertising expense was not material for the years ended November
      30,
      2005 and 2004.





3.
            CASH
                DEPOSITS





At
      November 30, 2005 and 2004, the carrying amount of the Company’s cash deposits
      were $7,706 and $258,451 **,** respectively, and the bank balances were $3,182 and $306,248, respectively.
      Of
      the bank balances, $3,182 and **** $103,250
      were covered by federal depository insurance, respectively.





4.
            TRADE
                RECEIVABLES





Trade
      receivables are carried at original invoice amount. Trade receivables as of
      November 30, 2005
      and 2004 were $177,453 and $246,985 respectively, and of the total,
      85% **** and **** 96% **,** respectively, are from one casino customer. Management determines the allowance
      for doubtful accounts after reviewing individual customer accounts as well
      as
      considering both historical
      and expected credit loss experience. At November 30, 2005 and 2004,
      the reserve
      for trade receivables was $2,000 and management believes that this reserve
      was
      adequate.





5.
            INVENTORIES





Inventories
      as of November 30 are as follows:


2005
            
            2004Service
                parts
            
            $
            117,355
            
            $
            114,321Fuel
            
            
            4,725
            
            
            4,725Total
            
            $
            122,080
            
            $
            119,046





Fuel
      is a
      significant operating expense, which can fluctuate in price as a result of
      variations in supply and demand in the economic markets.







F-11
 BESTWAY
              COACH EXPRESS INC.
 NOTES
            TO FINANCIAL STATEMENTS
 NOVEMBER
              30, 2005 AND 2004








6.
            PROPERTY
                AND EQUIPMENT





Property
      and equipment as of November 30 are as follows:





EstimatedUseful
                  Lives(Years)
              
              2
                  0
                  0 5
              
              2
                  0
                  0 4Capitalized
                  leased - motorcoaches
              
              
              7
              
              $
              8,349,122
              
              $
              7,965,625Leasehold
                  improvements
              
              
              6
              
              
              311,245
              
              
              300,982Machinery
                  and equipment
              
              
              5-7
              
              
              184,793
              
              
              180,835Furniture
                  and fixtures
              
              
              7-10
              
              
              3,577
              
              
              -8,848,737
              
              
              8,447,442Less:Accumulateddepreciation
                  andamortization
              
              
              
              
              
              2,603,380
              
              
              3,409,868Total
              
              
              
              
              $
              6,245,357
              
              $
              5,037,574





Depreciation
      and amortization on property and equipment charged to expense was $898,240
      and
      $549,683 for the years ended November 30, 2005 and 2004, respectively.
      Accumulated amortization of capitalized leased assets totaled $2,061,369 and
      $3,018,677 at November 30, 2005 and 2004, respectively. Amortization expense
      for
      capitalized leases was $747,421 and $531,042 for the years ended November 30,
      2005 and 2004, respectively. Of the 2005 depreciation and amortization expense,
      $376,773 was due to a change in estimate of the motorcoaches’ useful lives (Note
      18). No additional impairment in accordance with SFAS #144 *,
      “Accounting for the Impairment or Disposal of Long-Lived
      Assets,”* was
      observed.





7.
            CAPITALIZED
                LEASE OBLIGATIONS





The
      Company leases 12 of its motorcoaches from various financing companies. The
      lease terms are generally seven (7) years and contain a purchase option, which
      management estimates will be substantially less than the fair market value
      of
      each motorcoach at the end of the lease term. It is management’s intention to
      exercise the purchase option at the end of each lease. As a result, the present
      value of the remaining principal lease payments is recorded as a capitalized
      lease obligation.





During
      the year ended November 30, 2004, several of the capitalized lease obligations
      matured, and the Company exercised the purchase options associated with these
      leases, which had the effect of extending the leases on these motorcoaches
      generally over three (3) more years. Costs associated with the purchase options
      totaled $150,311 and are amortized as interest expense over the new terms of
      the
      leases. Unamortized costs at November 30, 2005 of $64,075, net of $86,236
      accumulated amortization, are netted with the long-term capital lease obligation
      on the balance sheet.







F-12
 BESTWAY
              COACH EXPRESS INC.
 NOTES
            TO FINANCIAL STATEMENTS
 NOVEMBER
              30, 2005 AND 2004








7.
            CAPITALIZED
                LEASE OBLIGATIONS (CONT’D)








****2
                0
                0 5
            
            2
                0
                0 4Total
                obligations under capital leases consist of notes payable to finance
                companies, implicit interest rates ranging from 6% to 13% due in
                various
                monthly installments, maturing at various dates through May
                2008.
            
            $
            1,476,908
            
            $
            3,363,510Less
                current maturities
            
            
            (708,238
            )
            
            (1,284,282
            )Long
                term portion
            
            $
            768,670
            
            $
            2,079,228





The
      majority of the Company’s motorcoach leases require the Company to make ten
      monthly lease payments, with no payments due for January and February throughout
      the lease term. Included on the balance sheet under the caption “Accrued
      liabilities” is an amount that has been accrued for the interest and penalties
      on the motorcoach lease payments in arrears. At November 30, 2005 and 2004,
      the
      amount of principal and interest in arrears totaled $82,062 and $104,459,
      respectively. In addition, the Company may be liable for penalties and other
      related charges. At November 30, 2005, the amounts of any additional penalties
      are not readily determinable by management. There have been no derogatory
      actions taken by any of the financing companies against the Company for being
      in
      arrears, and as of the report date the Company has made current substantially
      all capitalized leases. Accordingly, management believes it is in substantial
      compliance with its lease covenants.





Future
      minimum payments under capital lease obligations mature in 2008 and are as
      follows:





Years
                ending November 30,2006
            
            $
            822,3852007
            
            
            374,5292008
            
            
            447,491Total
                capitalized lease obligations
            
            
            1,644,405Less
                amounts representing interest
            
            
            (167,497
            )Total
                present value of minimum lease payments
            
            
            1,476,908Less
                unamortized purchase option costs
            
            
            (64,075
            )Net
                lease obligation
            
            $
            1,412,833




F-13
 BESTWAY
                COACH EXPRESS INC.
 NOTES
              TO FINANCIAL STATEMENTS
 NOVEMBER
                30, 2005 AND 2004




8.
            RELATED
                PARTY TRANSACTIONS





DUE
      TO
      STOCKHOLDERS





Due
      to
      stockholders consists of unsecured non-interest bearing demand notes payable.
      There were $45,832 and $57,495 in due to stockholders as of November 30, 2005
      and 2004, respectively. The stockholders’ intention is to not demand for
      repayment of these notes for the next twelve months.





During
      fiscal year 2004, the Company’s President assumed a liability from a related
      party who owed the Company $313,911. At the time of the assignment, the Company
      owed its President $363,962. The assignment, therefore, reduced the outstanding
      related party receivable balance to $0 and the amount due to the Company’s
      President to $50,051. The Company’s president is also a stockholder, so this
      amount was reflected in the November 30, 2004 ‘Due to stockholders’
balance.





On
      June
      5, 2005, the Company issued 2,000,000 shares of common stock to its President,
      in exchange for his personal guaranty of $4,046,000 in motorcoach financing
      (Note 13). The shares were valued at $.05 per share at June 5, 2005, resulting
      in a transaction value of $100,000.





NOTES
      PAYABLE - RELATED PARTIES





Notes
      payable - related parties consists of non-interest bearing notes payable with
      no
      fixed terms of repayment, and are payable on demand. The purpose of the notes
      was to cover lease liabilities and other obligations that the Company was unable
      to meet during the economic downturn after the events of September 11, 2001.
      There were $208,012 and $291,500 in notes payable - related parties as of
      November 30, 2005 and 2004, respectively, and $122,600 and $152,900 were paid
      on
      notes payable - related parties for the years ended November 30, 2005 and 2004,
      respectively.





9.
            MAJOR
                CUSTOMERS





The
      Company has three casino customers that as of November 30, 2005 and 2004
      provided revenues equivalent to 88% and 83%, respectively, of total revenues
      for
      the year. The loss of any one or all of these customers in the aggregate could
      have a material effect on the Company’s operations. The balance of the Company’s
      customers consists of other casinos, tour agencies, and local community and
      civic groups that contract for charter services on a first-come first-served
      basis, usually comprising day trips.





The
      Company had the following concentrations of business with  customers
      constituting greater than 10% of the Company’s gross revenues during the years
      ended November 30, 2005 and/or 2004:





For
                the Years EndedNovember
                30,2
                0
                0 5
            
            2
                0
                0 4Customer
                A
            
            
            63
            %
            
            47
            %Customer
                B
            
            
            16
            %
            
            21
            %Customer
                C
            
            
            9
            %
            
            15
            %Total
            
            
            88
            %
            
            83
            %







F-14
 BESTWAY
                COACH EXPRESS INC.
 NOTES
              TO FINANCIAL STATEMENTS
 NOVEMBER
                30, 2005 AND 2004


10.
              OTHER
                  INCOME
 
 The
        Company maintains office space in downtown New York City. All businesses
        in the
        area in which the Company is located qualified for grants and relief from
        various federal and state agencies due to the events of September 11, 2001.
        During the years ended November 30, 2001 through 2003, the Company received
        a
        cumulative $140,983 in grants related to this event. Other income received
        during the years ended November 30, 2005 and 2004 consisted mainly of insurance
        claim proceeds and fuel tax refunds.
 
 11.
              INCOME
                  TAXES


Income
      tax expense (benefit) consists of the following:





Year
                Ended November 30,Current:
            
            2005
            
            2004Federal
            
            $
            -
            
            $
            -State
            
            
            -
            
            
            --
            
            
            -Deferred:Federal
            
            $
            (401,565
            )
            $
            26,496State
            
            
            (57,366
            )
            
            3,786(458,931
            )
            
            30,282Total
            
            $
            (458,931
            )
            $
            30,282





A
      reconciliation of income tax expense (benefit) to the amount computed using
      statutory federal rates is as follows:





Year
                Ended November 30,2005
            
            2004Tax
                at statutory rate of 35%
            
            $
            (398,260
            )
            $
            25,358Non-deductible
                expenses
            
            
            -
            
            
            1,301State
                income tax (benefit)
            
            
            (57,366
            )
            
            3,623Redetermination
                of prior year tax liability
            
            
            (3,305
            )
            
            -Total
                income tax
            
            $
            (458,931
            )
            $
            30,282





The
      Company has implemented SFAS No. 109 “Accounting for Income Taxes”, which
      provides for a liability approach to accounting for income taxes. Total deferred
      tax assets and liabilities as of November 30 are as follows:




2005
            
            2004Deferred
                tax assets - Tax NOL
            
            $
            883,968
            
            $
            1,282,236Deferred
                tax liabilities - Depreciation
            
            
            (960,405
            )
            
            (1,817,604
            )Net
                deferred tax liability - long-term
            
            $
            (76,437
            )
            $
            (535,368
            )




F-15
 BESTWAY
                COACH EXPRESS INC.
 NOTES
              TO FINANCIAL STATEMENTS
 NOVEMBER
                30, 2005 AND 2004





11.
            INCOME
                TAXES (CONT’D)





Deferred
      income taxes result from the effect of transactions that are recognized in
      different periods for financial and tax reporting purposes.





Deferred
      income taxes are recognized for the tax consequences of temporary differences
      by
      applying statutory tax rates to differences between the financial reporting
      and
      the tax bases of existing assets and liabilities. These temporary differences
      related primarily to property and equipment due to the difference between book
      and tax depreciation on the motor coaches.





The
      Company has federal and state net operating loss carryforwards of approximately
      $2,210,000 expiring in the years 2018 through 2024. The tax benefit of these
      net
      operating loss carryforwards, based on an effective tax rate of 40% is
      approximately $883,968.





Annual
      fuel tax credits approximating $80,000, which do not enter into the computation
      of current and deferred taxes, have been netted against the related fuel
      costs.





12.
            SHORT-TERM
                BORROWINGS





At
      November 30, 2005 and 2004, the Company had several lines of credit in place
      with its banks and credit card companies. The total borrowings outstanding
      at
      November 30, 2005 and 2004 were $294,746 and $284,774, respectively. The
      weighted average interest rate for these short-term borrowings as of the fiscal
      years ended November 30, 2005 and 2004 was approximately 5%.





13.
            LONG
                - TERM BORROWINGS





NOTES
      PAYABLE - BANKS





At
      November 30, 2005 and 2004, there were several lines of credit or other credit
      facilities that were in place with the Company’s banks, other financial
      institutions, and the Small Business Administration. The total borrowing
      outstanding on these credit facilities were $352,912 and $317,378, respectively,
      as follows:





November
                30,2005
            
            2004Note
                payable - Small Business Administration (SBA). The loan origination
                date
                was January 26, 2002. Payments on the loan began in the twenty-fifth
                month
                after the loan origination date, and continue for 336 months. The
                note has
                an interest rate of 4%, and principal and interest payments of $372
                are
                due monthly. The loan is secured by a loan on the principal residence
                of
                the majority shareholder of the Company.
            
            $
            71,022
            
            $
            73,574





F-16
 BESTWAY
                COACH EXPRESS INC.
 NOTES
              TO FINANCIAL STATEMENTS
 NOVEMBER
                30, 2005 AND 2004





13.
            LONG
                - TERM
                BORROWINGSAND OTHER CREDIT FACILITIES
                (CONT’D)





November
                30,2005
            
            2004Note
                payable - Small Business Administration (SBA). The loan origination
                date
                was November 24, 2003. Payments on the loan began in the fifteenth
                month
                after the loan origination date, and continue for 60 months. The
                note has
                an interest rate of 4%, and principal and interest payments of $1,842
                are
                due monthly. The loan is secured by the Company’s total
                assets.
            
            
            65,628
            
            
            86,243Note
                payable - Small Business Administration (SBA). The loan origination
                date
                was November 24, 2003. Payments on the loan began in the fifteenth
                month
                after the loan origination date, and continue for 60 months. The
                note has
                an interest rate of 2%, and principal and interest payments of $2,629
                are
                due monthly. The loan is secured by the Company’s total
                assets.
            
            
            99,196
            
            
            128,444Note
                payable - Chase. The loan origination date was October 2001. The
                repayment
                terms are interest only for 12 months at 2% below the Chase Prime
                Rate,
                then sixty monthly payments of principal and interest at the Chase
                Prime
                Rate plus the Rider to the loan agreement. The interest rate calculates
                to
                8.4%, with required fixed principal payments of $835 per month. The
                loan
                is secured by a loan on the principal residence of the majority
                shareholder of the Company.
            
            
            18,992
            
            
            29,117Note
                payable - Small Business Administration (SBA). The loan origination
                date
                was August 18, 2005. Payments on the loan began in the second month
                after
                the loan origination date, and continue for 84 months. The note has
                an
                interest rate of 6%, and principal and interest payments totaling
                $1,461
                are due monthly. The loan is secured by the Company’s total
                assets.
            
            
            98,074
            
            
            -Total
                notes payable
            
            
            352,912
            
            
            317,378Less
                current portion
            
            
            (73,250
            )
            
            (59,785
            )Long-term
                portion
            
            $
            279,662
            
            $
            257,593







F-17
 BESTWAY
                COACH EXPRESS INC.
 NOTES
              TO FINANCIAL STATEMENTS
 NOVEMBER
                30, 2005 AND 2004




13.
              LONG
                - TERM BORROWINGS AND OTHER CREDIT FACILITIES
                (CONT’D)





The
      following are the maturities of long-term debt for each of the next five
      years:








For
                the Year EndingNovember
                30,2006
            
            $
            73,2502007
            
            
            74,6302008
            
            
            67,7722009
            
            
            27,6702010
            
            
            17,092Thereafter
            
            
            92,498Total
            
            $
            352,912





MOTORCOACH
      FINANCING





On
      June
      15, 2005, the Company purchased eleven motorcoaches for $4,211,000 from Motor
      Coach Industries. The purchase was financed with $165,000 trade-in allowance
      from eleven older motorcoaches previously traded in and a new loan of
      $4,046,000. The note has an interest rate of 8.25% per annum, and principal
      and
      interest payments of $56,417 are due monthly. Payments on the loan continue
      for
      84 months to a balloon payment due on June 15, 2012. The Company’s President
      secured the loan with a personal guarantee in exchange for 2,000,000 shares
      of
      common stock valued at $100,000 (see Note 19). The guarantee is amortized as
      interest expense over the life of the loan. The deferred guarantee cost at
      November 30, 2005 of $92,858, net of $7,142 accumulated amortization, is netted
      with the long-term motorcoach on the balance sheet.





The
      following are maturities of the motorcoach financing for each of the next five
      years:





For
                the Year EndingNovember
                30,2006
            
            $
            697,2942007
            
            
            676,9922008
            
            
            676,9922009
            
            
            676,9922010
            
            
            676,992Thereafter
            
            
            534,615Total
                maturities
            
            
            3,939,877Less
                deferred guarantee cost
            
            
            (92,858
            )Net
                financing obligation
            
            $
            3,847,019





F-18
 BESTWAY
                COACH EXPRESS INC.
 NOTES
              TO FINANCIAL STATEMENTS
 NOVEMBER
                30, 2005 AND 2004





14.
            ACQUISITIONS
                AND DISPOSITION OF SUBSIDIARY





On
      April
      23, 2002, the Company acquired 7,000,000 shares of common stock of AMCO from
      an
      officer/stockholder (“officer”), who, prior to the acquisition of the shares by
      the Company, was AMCO’s sole officer and director and its controlling
      stockholder. The 7,000,000 shares represented approximately 73% of AMCO's issued
      and outstanding common stock at November 30, 2003.





The
      Company acquired the shares pursuant to a Stock Purchase Agreement with the
      officer and the purchase price for the shares was $250,000. In addition, as
      part
      of the acquisition, the Company also loaned AMCO $101,500 (plus $35,782 in
      interest) to pay off the loan balance from the officer and other liabilities.
      The goodwill recorded totaled $339,319 at November 30, 2003, and represented
      the
      fair value of AMCO as a publicly traded company.





On
      November 23, 2004, the Company sold 6,900,000 shares of AMCO for a purchase
      price of $375,000. The Company retained 100,000 shares that are of nominal
      value
      and so therefore not presented on the balance sheet. Pursuant to the sale,
      the
      Company forgave all outstanding receivables owed by AMCO, amounting to $166,239
      at November 23, 2004, all of which resulted in the recording of goodwill of
      $339,319 in prior years and an additional $14,603 in 2004. The transaction
      resulted in a gain of $21,078 from the sale of the subsidiary for the year
      ended
      November 30, 2004.





15.
            COMMITMENTS
                AND CONTINGENCIES





The
      Company leases its terminal / maintenance facilities and its New York City
      offices under long term leases with unrelated parties. Combined rent expense
      for
      the years ended November 30, 2005 and 2004 were $195,639 and $164,547,
      respectively. The following represents future minimum rental payments for its
      noncancelable operating leases for its terminal and maintenance facility and
      its
      office facilities:




Years
                ending November 30,2006
            
            $
            146,0622007
            
            
            136,5132008
            
            
            130,5002009
            
            
            19,000Total
            
            $
            432,075





16.
            REDUCTION
                OF TRADE DEBT





During
      the year ended November 30, 2004, the Company entered into a trade debt
      restructuring that resulted in a reduction of future cash payments due on a
      trade payable. The outstanding balance was reduced from $100,211 to $59,650.
      The
      reduction of $40,561 was recognized as a reduction in operating expenses for
      the
      year ended November 30, 2004. Future payments on this debt are all due within
      the current period, and are included in the balance sheet caption “Accounts
      payable and accrued liabilities.”




F-19
 BESTWAY
                COACH EXPRESS INC.
 NOTES
              TO FINANCIAL STATEMENTS
 NOVEMBER
                30, 2005 AND 2004





17.
            LITIGATION





The
      Company is subject to certain claims and lawsuits arising out of the ordinary
      course of doing business. The primary risks in the Company’s operations are
      bodily risks in the Company’s operations, property damage to third parties and
      workers’ compensation and other various liability claims. No material claims
      existed at November 30, 2005.





18.
            CHANGE
                IN ESTIMATE





The
      Company determined that a change in the estimated useful lives and salvage
      values of certain depreciable assets was appropriate. When these assets, all
      motorcoaches, were originally acquired, management estimated that they would
      be
      held for their full useful life of 15 years, and estimated that the salvage
      value at the end of this period would be negligible. Management has determined
      that a more appropriate estimate would be a 7 to 10 year life, with the
      appropriate salvage value at the end of these periods. The Company anticipates
      that the revised estimates will result in no or minimal losses on future
      motorcoach trade-ins. Useful life varies based on applicable motorcoach and
      financing terms and methods.





In
      accordance with SFAS 154 *,
      “Accounting Changes and Corrections in Error,”* the
      cumulative effect of the change in estimate has not been reflected
      retroactively, but rather has been recorded in the current period, and will
      be
      perpetuated in future periods that will be affected. The change in estimate
      resulted in an additional $376,773 depreciation expense included in operating
      expenses during the year ended November 30, 2005. The additional depreciation
      expense resulted in an increase to basic and diluted loss per share of
      approximately $.03.





19.
            COMMON
                STOCKISSUANCE
                OF SHARES FOR GUARANTEE





On
      June
      5, 2005, the Company issued to its President an additional 2,000,000 shares
      in
      connection with his agreement to personally guarantee the $4,046,000 in debt
      incurred by the Company to acquire new motorcoaches (Note 13). The board
      determined, after consultation with its attorneys and others, that a guarantee
      fee of 2.5% or $100,000 was reasonable. The board then evaluated the financial
      condition and prospects of Bestway and determined that each share of Bestway
      common stock has a fair market value of $.05 (see ‘STOCK VALUATION’ below). The
      board determined that it would be in the Company’s best interests to pay the
      guarantee fee in stock and, therefore, issued the 2,000,000 shares.





F-20
 BESTWAY
                COACH EXPRESS INC.
 NOTES
              TO FINANCIAL STATEMENTS
 NOVEMBER
                30, 2005 AND 2004





19.
            COMMON
                STOCK (CONT’D)





STOCK
      VALUATION





In
      March
      2002, the Company effected a private placement of 5,000,000 shares at a price
      per share of $0.10, raising an aggregate of $500,000. Upon completion of the
      offering, there were 14,000,000 shares outstanding, giving the Company a market
      capitalization of $1,400,000. The $0.10 offering price was determined by the
      board of directors of the Company based upon the Company’s revenues, total
      assets, and total stockholder’s equity. The Company’s 2001 audited financials
      disclosed that the Company had $3,176,596 in revenues, $7,442,631 in total
      assets and Stockholder’s Equity of $220,618. In determining the Company’s stock
      price for purposes of the May 2005 issuance of 2 million shares to its President
      (see above paragraph), the board of directors considered the same factors that
      it did in March 2002. Based on the Company’s audited financial statements for
      the fiscal year ended November 30, 2004, the Company had revenues of $5,254,667,
      but its total assets were only $6,014,069 and the Company had a stockholder’s
      deficit of $651,039. Therefore, based upon these financial indicators the board
      determined that the fair market value of the stock should be $0.05 per share
      giving the Company a market capitalization of $685,000.





20.
            TREASURY
                STOCK





On
                December 7, 2004, the Company purchased 20,000 shares of its outstanding
                common stock from one of its stockholders for $2,000. The Company
                does not
                intend to cancel the shares, and accordingly has deducted the cost
                of the
                treasury stock from retained earnings.





21.
            SUBSEQUENT
                EVENTS





In
      February 2006, the Company launched a new interstate commuter service. The
      Company now provides scheduled motorcoach service from a midtown location in
      New
      York City near Penn Station to a location in Philadelphia. During the first
      month of operations, the new interstate commuter services generated
      approximately $35,000 in revenues and incurred approximately $113,000 in
      expenses. The Company expects the revenues from the interstate commuter services
      to increase and the expenses to decrease until the service is normalized. The
      Company estimates that its average monthly revenues and expenses from this
      service during fiscal year 2006 will be $190,000 and $142,000, respectively.




F-21
 BESTWAY
                COACH EXPRESS INC.
 NOTES
              TO FINANCIAL STATEMENTS
 NOVEMBER
                30, 2005 AND 2004




**EXHIBIT
      INDEX**





**Exhibit
                Number**
            **Exhibit
                Description**3.1
            Articles
                of Incorporation [Incorporated by reference to Exhibit 2.1 to the
                Company’s Registration on Form 10-SB filed with the SEC on July 14,
                2005]3.2
            Certificate
                of Amendment to Articles of Incorporation [Incorporated by reference
                to
                Exhibit 2.2 to the Company’s Registration on Form 10-SB filed with the SEC
                on July 14, 2005]3.3
            Bylaws
                [Incorporated by reference to Exhibit 2.3 to the Company’s Registration on
                Form 10-SB filed with the SEC on July 14, 2005]10.1
            Employment
                Agreement, dated July 5, 2005, between the Company and Wilson Cheng.
                [Incorporated by reference to Exhibit 6.1 to the Company’s Registration on
                Form 10-SB filed with the SEC on July 14, 2005]10.2
            Agreement
                to Purchase, dated May 24, 2005, between the Company and Motor Coach
                Industries. [Incorporated by reference to Exhibit 6.2 to the Company’s
                Registration on Form 10-SB filed with the SEC on July 14,
                2005]10.3
            Security
                Agreement and Promissory Note, dated May 24, 2005, by the Company
                in favor
                of Caterpillar Financial Services Corporation. [Incorporated by reference
                to Exhibit 10.3 to the Company’s Registration on Form 10-SB filed with the
                SEC on July 14, 2005]10.4
            Agreement,
                dated February 1, 2004, between the Company and Salvatore Basile,
                as
                amended (for Depot). [Incorporated by reference to Exhibit 10.4 to
                Amendment No. 2 to the Company’s Registration on Form 10-SB filed with the
                SEC on December 14, 2005]10.5
            Sublease,
                dated October 31, 2003, between the Company and Harrison Coach, Int’l.
                (for Secondary Depot). [Incorporated by reference to Exhibit 10.5
                to
                Amendment No. 3 to the Company’s Registration on Form 10-SB filed with the
                SEC on January 25, 2006]10.6
            Agreement
                of Lease, dated as of February 1, 1997, between the Company and Wing
                Ming
                Properties (USA). [Incorporated by reference to Exhibit 10.6 to Amendment
                No. 2 to the Company’s Registration on Form 10-SB filed with the SEC on
                December 14, 2005]10.7
            Master
                Lease Agreement, dated October 6, 1997, between the Company and CIT
                Group/Equipment Financing, Inc. (Bus #1818). [Incorporated by reference
                to
                Exhibit 10.7 to Amendment No. 2 to the Company’s Registration on Form
                10-SB filed with the SEC on December 14,
                2005]


F-22
 BESTWAY
                COACH EXPRESS INC.
 NOTES
              TO FINANCIAL STATEMENTS
 NOVEMBER
                30, 2005 AND 2004





10.8
            Commercial
                Transportation Lease Agreement, dated September 22, 1997, between
                the
                Company and Geico Corporation d/b/a GC Capital Fleet Services, and
                Lease
                Renewal, dated June 15, 2004, between the Company and General Electric
                Capital Corporation (Buses #1838 and #1848). [Incorporated by reference
                to
                Exhibit 10.8 to Amendment No. 3 to the Company’s Registration on Form
                10-SB filed with the SEC on January 25, 2006]10.9
            Commercial
                Transportation Lease Agreement, dated November 13, 1997, between
                the
                Company and GC Capital Fleet Services (Bus #1878). [Incorporated
                by
                reference to Exhibit 10.9 to Amendment No. 2 to the Company’s Registration
                on Form 10-SB filed with the SEC on December 14, 2005]10.10
            Lease
                Agreement, dated February 21, 1998, between the Company and Debis
                Financial Services, Inc. (Bus #1888). [Incorporated by reference
                to
                Exhibit 10.10 to Amendment No. 2 to the Company’s Registration on Form
                10-SB filed with the SEC on December 14, 2005]10.11
            Commercial
                Transportation Lease Agreement, dated December 10, 1999, between
                the
                Company and Partnership Financial Services, Inc. d/b/a ABC Financial
                Services (Buses #2198 and #3118). [Incorporated by reference to Exhibit
                10.11 to Amendment No. 3 to the Company’s Registration on Form 10-SB filed
                with the SEC on January 25, 2006]10.12
            Master
                Lease Agreement No. 87101, dated June 8, 2001, between the Company
                and
                American Equipment Leasing, a division of EAB Leasing Corp. (Bus
                #3148).
                [Incorporated by reference to Exhibit 10.12 to Amendment No. 2 to
                the
                Company’s Registration on Form 10-SB filed with the SEC on December 14,
                2005]10.13
            Commercial
                Transportation Lease Agreement, dated June 25, 2001, between the
                Company
                and Partnership Financial Services, Inc. d/b/a ABC Financial Services
                (Bus
                #3168). [Incorporated by reference to Exhibit 10.13 to Amendment
                No. 2 to
                the Company’s Registration on Form 10-SB filed with the SEC on December
                14, 2005]10.14
            Operating
                Lease Agreement, dated April 18, 2001, between the Company and ABC
                Bus
                Leasing, Inc. (Bus #3178). [Incorporated by reference to Exhibit
                10.14 to
                Amendment No. 2 to the Company’s Registration on Form 10-SB filed with the
                SEC on December 14, 2005]10.15
            Commercial
                Transportation Lease Agreement, dated May 8, 2001, between the Company
                and
                ABC Bus Leasing, Inc. (Bus #3188). [Incorporated by reference to
                Exhibit
                10.15 to Amendment No. 3 to the Company’s Registration on Form 10-SB filed
                with the SEC on January 25, 2006]


10.16
            Master
                Lease No. 15371, dated June 8, 2001, between the Company and TFC
                Leasing,
                Inc. (Bus #3198). [Incorporated by reference to Exhibit 10.15 to
                Amendment
                No. 2 to the Company’s Registration on Form 10-SB filed with the SEC on
                December 14, 2005]




F-23
 BESTWAY
                COACH EXPRESS INC.
 NOTES
              TO FINANCIAL STATEMENTS
 NOVEMBER
                30, 2005 AND 2004




10.17
            Lease,
                dated January 29, 2004, between the Company and Penn Visual, Inc.
                [Incorporated by reference to Exhibit 10.17 to Amendment No. 2 to
                the
                Company’s Registration on Form 10-SB filed with the SEC on December 14,
                2005]10.18
            Philadelphia
                Sub-Lease, dated January 20, 2006, between the Company and Apex Bus
                Company.14
            Code
                of Ethics [Incorporated by reference to Exhibit 12 to Amendment No.
                2 to
                the Company’s Registration on Form 10-SB filed with the SEC on December
                14, 2005]31
            Rule
                13a-14(a)/15d-14(a) Certification by the Principal Executive Officer
                and
                Principal Financial Officer32
            Section
                1350 Certifications by the Principal Executive Officer and Principal
                Financial Officer


________________________________________