**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, 2006





**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, 7thFloor,
      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. o





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
oNo x





State
      issuer's revenues for its most recent fiscal year: $ 6,137,154




The
      aggregate market value of voting and non-voting common equity held by
      non-affiliates of the registrant as of March 12, 2007 was not determinable.





The
      number of shares of the registrant's common stock issued and outstanding as
      of
      March 12, 2007: 13,750,000 shares issued, 13,730,000 outstanding.





INDEX
      TO
      FORM 10-KSB ANNUAL REPORT




Page**Part
                I**Item
                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
            23Item
                8.
            Changes
                in and Disagreements with Accountants on Accounting and FinancialDisclosure
            24Item
                8A
            Controls
                and Procedures
            24Item
                8B
            Other
                Information
            25**Part
                III**Item
                9.
            Directors,
                Executive Officers, Promoters and Control Persons; Compliance with
                Section
                16(a) of the Exchange Act
            25Item
                10.
            Executive
                Compensation
            27Item
                11.
            Security
                Ownership of Certain Beneficial Owners and Management
            29Item
                12.
            Certain
                Relationships and Related Transactions
            30Item
                13.
            Exhibits
            31Item
                14.
            Principal
                Accountant Fees and Services
            33Signatures
            35Financial
                Statements
            36





**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 casinos in Connecticut, Atlantic City, and New Jersey, which, for
      the twelve-month period ending November 30, 2006, accounts for approximately
      85%
      of our revenues, charter services to tour and travel agencies, which accounts
      for approximately  4%
      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. During the twelve-month period ending November 30, 2006,
      the new interstate commuter service generated approximately $676,834 in
      revenues, approximately 11% of total revenues.





***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 89% of our services are provided on a contracted basis and less
      than **** 11%
      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.





4




***Operations***





Our
      garage depot is located in Brooklyn, New York. On staff at this location are
      4 **** mechanics
      who maintain our motorcoach fleet, 4 office staff, 1 dispatcher, 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 either
      lease or own.





Prior
      to
      June 2005, we used only Van Hool motorcoaches. In May 2005 we entered into a
      contract relating to the acquisition of eleven new MCI motorcoaches. In June
      2005, we received the new MCI motorcoaches and traded in eleven of our older
      Van
      Hool motorcoaches. We are currently in negotiations with MCI to trade in the
      remaining motorcoaches for 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 better compete
      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
                coveredEngine
            
            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




5




The
      warranties on our older Van Hool motorcoaches have all expired.





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
      12,
      2007. 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, 2006, we had approximately 45 full time employees, of whom 30
      were
      drivers and 4 were maintenance personnel. The balance included administrative
      personnel, sales and customer service personnel and dispatchers. We also utilize
      approximately 12 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.




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.




6




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 motorcoaches operating in New York’s Chinatown. 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, 2006 and 2005 we generated approximately
      $4,098,600 and $4,150,874 **** in
      revenues, respectively, from one customer. These revenues constituted
      approximately 67% and 63% **** of
      our
      total revenues for fiscal years 2006 and 2005, respectively. Another customer
      contributed $1,035,976 and $1,025,934 to our revenues in fiscal year 2006 and
      2005, respectively, which constituted 17% and 16% of our 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 customers 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 was $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
      for approximately $3,877 per month.





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 April 2007, at which point we will likely renew for a year,
      with
      an option to terminate at a month’s notice.





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. This lease will expire in 2011.





We
      have
      also entered into a residential lease for a small apartment in Philadelphia
      to
      be used by our motorcoach drivers on the Philadelphia commuter runs when
      overnight stays are necessary. We pay a monthly rental amount of $730 plus
      $10
      maintenance. The lease expired in February 2007, at which point it was renewed
      for another 12 months.





We
      had a
      secondary depot facility located in Bellport, New York that consists of
      approximately 15,000 square feet. We mainly used this facility to park some
      of
      our motorcoaches when they were not in use. We shared this facility with other
      motorcoach companies, and were entitled to use this facility under a sublease
      that contracted to terminate on October 30, 2008. We paid a monthly rental
      of
      $1,500 under the sublease. In March 2006, we determined that we no longer needed
      this facility, and cancelled the lease accordingly.





**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 2006.


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 March 12, 2007, we had 13,750,000 shares issued and 13,730,000
      outstanding. The difference is due to 20,000 shares of treasury stock the
      Company purchased from a shareholder in 2005.





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.*** **





As
      of
      June 28, 2006, our common stock has been quoted under the symbol “BWCX.OB” on
      the over-the-counter electronic bulletin board maintained by the National
      Association of Securities Dealers, Inc. (NASD). So far, our common stock has
      experienced only minimal trading. There is no assurance that a significant
      trading market will ever develop or, if such a market does develop, that it
      will
      continue.





When
      the
      price of our common stock is below $5.00 per share, as it currently is, our
      common stock is considered to be a "penny stock" that is subject to rules
      promulgated by the Securities and Exchange Commission (Rule 15-1 through 15g-
      9)
      under the Securities Exchange Act of 1934. These rules establish 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




10




*
            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.





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 13,730,000 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.





***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.




11




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 balance sheets.





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





***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 Fridays through Sundays, we increase
      the
      number of our roundtrip schedules to the Mohegan Sun to 19. We provide 5
      roundtrip schedules on Mondays through Thursdays from New York City to several
      Atlantic City Casinos. We increase the number of roundtrip schedules to these
      Atlantic City, New Jersey casinos to 7 on Fridays through Sundays. Some of
      our
      motorcoaches make more than one roundtrip per day to and from the casinos that
      they serve.





During
      the years ended November 30, 2006 and 2005, approximately 4% and 10%,
      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.




12




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 18
      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 fiscal year ended November 30, 2006, the new interstate commuter services
      generated approximately $676,834 in revenues and incurred approximately $727,187
      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
      2007 will be $95,000 and our average monthly expenses relating to this service
      will be $85,000 to $90,000. 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.





YEAR
                ENDEDNovember
                30, 2006
            
            November
                30, 2005Amount
            
            Amount
            
            Amount
            
            PercentageCasinos
            
            $
            5,216,079
            
            
            85
            %
            $
            5,962,937
            
            
            90
            %Phil.
                Run
            
            
            676,834
            
            
            11
            %Tours
            
            
            243,146
            
            
            4
            %
            
            649,208
            
            
            10
            %Charter
            
            
            0
            
            
            <1
            %
            
            300
            
            
            <1
            %Other
            
            
            1,095
            
            
            <1
            %
            
            500
            
            
            <1
            %Total
            
            $
            6,137,154
            
            
            100
            %
            $
            6,612,945
            
            
            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.




13




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.





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 20% over the past few years. We cannot operate
      without insurance. In fiscal year 2006, we paid $609,168 in insurance premiums
      to insure our motorcoaches ($76,883 of which was for policies prepaid through
      various dates in 2007) and $91,086 in insurance premiums for worker’s
      compensation insurance. In fiscal year 2005, we paid $720,347 in insurance
      premiums to insure our motorcoaches and $79,052 in insurance premiums for
      worker’s compensation insurance. In 2004, we paid $475,851 in insurance premiums
      to insure our motorcoaches and $75,411 in insurance premiums for worker’s
      compensation insurance. At November 30, 2006 and 2005, we also owed $131,726
      and
      $80,475 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 2006 and 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.




14




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 garage rent. For the years ended November
      30, 2006 and 2005, costs of sales approximated 93% and 83%, respectively, of
      total revenues. We spent approximately $1,235,748 and $1,080,651 on fuel in
      fiscal years 2006 and 2005, 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. Management believes that it currently has sufficient staff
      to support anticipated revenue levels for fiscal year 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.





***Operating
      Results For Fiscal Year 2006 Compared To 2005***





The
      following table summarizes the results of our operations during the fiscal
      year
      ended November 30, 2006 and 2005 and provides information regarding the dollar
      and percentage increase or (decrease) from the 2005 fiscal year to the 2006
      fiscal year.





**Line
                Item**
            
            **11/30/06**
            
            **11/30/05**
            
            **Increase
                (Decrease)**
            
            **Percentage
                Increase (Decrease)**Revenues
            
            $
            6,137,154
            
            $
            6,612,945
            
            $
            (475,791
            )
            
            (7.2
            %)Net
                loss
            
            
            (744,932
            )
            
            (678,955
            )
            
            65,977
            
            
            9.7
            %Operating
                Expenses
            
            
            5,681,100
            
            
            5,469,885
            
            
            211,215
            
            
            3.8
            %General
                and Administrative Expenses
            
            
            1,100,797
            
            
            780,126
            
            
            320,671
            
            
            41.1
            %Interest
                Expense
            
            
            (601,341
            )
            
            (558,473
            )
            
            42,868
            
            
            7.6
            %Loss
                per common share
            
            
            (.05
            )
            
            (.05
            )
            
            N/A
            
            
            N/A




15




Total
      revenues decreased $475,791, or 7.2%, to $6,137.154 in fiscal year 2006 as
      compared to fiscal year 2005. This represents a $475,791 or 7.2% decrease in
      revenues caused by our discontinuance of our line runs to two casinos in order
      to focus on the growth of our new Philadelphia line run. Although we generated
      approximately $676,834 in revenues from our Philadelphia line run during the
      year, our line run and tour income decreased by approximately $746,858,
      resulting in the net decrease.





Our
      tour
      revenues decreased from $649,208 in fiscal year 2005 to $243,146 in fiscal
      year
      2006. This represents a $406,062 or 62.6% decrease in tour generated revenues
      from year to year.





For
      the
      years ended November 30, 2006 and 2005, we incurred $5,681,100 and $5,469,885
      respectively, in operating expenses activities. This net increase in operating
      expenses of $211,215 is primarily attributable to changes in the following
      expenses:





·
            Parts
                and supplies decreased by $70,204 or 19%, due to our acquisition
                of new
                motorcoaches in May 2005. Since these motorcoaches are so new, they
                require less part replacement.




·
            Fuel
                expense increased by $155,097, or 14.4%, due to the continuous rise
                in the
                cost of fuel.





·
            Salary
                and commissions expense increased by $139,660 or 846.1%, due to cost
                of
                living increases in wages, and primarily to the hiring of ticket
                sellers
                for the new Philadelphia run.





·
            Motorcoach
                insurance increased by $53,882, or 9.7 %, due to the continuous rise
                in
                insurance premiums.





·
            Toll
                expense increased by $48,884, or 19%, due to our new commuter run
                to
                Philadelphia.





·
            Farm
                Outs decreased $110,383 or 29.3 % due to a decrease in Tour Income
                and
                focus on Philadelphia Run.





For
      the
      years ended November 30, 2006 and 2005, our general and administrative expenses
      were $1,100,797 and $780,126 respectively. The net increase in general and
      administrative expenses of $320,671 is primarily attributable to increases
      in
      the following expenses:




·
            Advertising
                increased by $57,895, or 776%, due to promotion of our new Philadelphia
                run.




·
            Bank
                charges and credit card fees increased by $53,869, or 242%, due to
                credit
                card fees borne by the Company for Philadelphia route tickets purchased
                with credit cards by customers, and poor cash
                flow.





·
            Professional
                fees increased by $136,484 or 183.4%, due to legal and consulting
                fees
                incurred for the set-up of the new Philadelphia run, and an increase
                in
                SEC legal and accounting fees incurred to maintain the Company’s status as
                a public reporting company.





·
            Salary
                expense increased by $34,363, or 8.8%, due to cost of living increases
                in
                wages.




Interest
      expense incurred during the year ended November 30, 2006 was $601,341 compared
      to interest expense in the same period of 2005 of $558,473. The 7.6 % increase
      is due to the amortization of a deferred guarantee cost incurred with the
      motorcoach purchase in June 2005, an increase in credit card debt (attributable
      to an increase in overall credit card balances), and interest expense incurred
      on a new SBA loan entered into in August 2005.




16




Net
      loss
      increased $65,977 from $678,955 for fiscal year 2005 compared to $744,932 for
      2006. This is due to the reasons for the decrease in revenues and increase
      in
      operating and general and administrative expenses described above.
      .





*Balance
      Sheet Items*





We
      had
      total current assets of $338,521 as of November 30, 2006, of which $ 1,575 was
      cash. Our total assets as of November 30, 2006 were $6,507,872 , and
      total
      current liabilities were $4,626,150. Our total stockholders' deficit as of
      November 30, 2006 was $1,914,426.
      Changes in individual balances were due to normal business operations and are
      a
      function of the items discussed under ‘Cash Flows’ below.





*Cash
      Flows*





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





Year
                Ended November 30,2006
            
            2005Net
                Cash Provided By Operating Activities
            
            $
            184,455
            
            $
            576,575Net
                Cash Used In Investing Activities
            
            
            (43,376
            )
            
            (42,907
            )Net
                Cash Used In Financing Activities
            
            
            (147,210
            )
            
            (784,413
            )Net
                Decrease in Cash and Cash Equivalents
            
            
            (6,131
            )
            
            (250,745
            )Cash
                and Cash Equivalents - Beginning of Period
            
            
            7,706
            
            
            258,451Cash
                and Cash Equivalents - End of Period
            
            
            1,575
            
            
            7,706





For
      years
      ended November 30, 2006 and 2005, our operating activities generated $184,455
      and $576,575 in cash, respectively. This decrease is primarily attributable
      to
      an increase in operating, general and administrative expenses of $531,886,
      or
      8.5%, while our revenues decreased by $475,791, or 7.2% as compared to the
      year
      ended November 30, 2005.





For
      years
      ended November 30, 2006 and 2005, we used $43,376 and $42,907, respectively,
      in
      investing activities. This nominal increase of $469, or 1.1%, during the year
      ended November 30, 2006 is due to the Company purchasing equipment for its
      new
      Philadelphia run offices.





For
      years
      ended November 30, 2006 and 2005, we used $147,210 and $784,413, respectively,
      in financing activities. The decrease in cash flow used in financing is
      primarily attributable to a net increase in proceeds received from related
      parties of $369,742 during the fiscal year ending November 30, 2006, compared
      to
      net payments of $83,488 made during the fiscal year ending November 30, 2005-
      a
      net increase of $453,230. In addition, the Company made total principal payments
      on its motorcoach leases and purchases of $705,677 during the fiscal year ending
      November 30, 2006, as compared to $863,151 in principal payments made during
      the
      same period in 2005- a decrease of $157,474.





17




***Liquidity
      and Capital Resources***





As
      of
      November 30, 2006, we had $1,575 in cash and cash equivalents, total current
      assets of $338,521 and a working capital deficit of $4,287,629. We generated
      $184,455 and $576,575 in cash flows from operating activities for the years
      ending November 30, 2006 and 2005, respectively.





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 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 of $809,200. 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.





We
      anticipate that revenues generated through our operations during the 2006 and
      2007 fiscal years 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
      are 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 $113,000. 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.





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%.





18





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 $650,000
      in
      revenues on average or have revenues of approximately $8,000,000 per year.





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.





***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.





***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.




19




·
            *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 $338,521 in current assets of which only
      $1,575***  ***was
      cash and cash equivalents at November 30, 2006. Our total current liabilities
      as
      at such date were $4,626,150. This means we have a working capital deficit
      of
      $4,287,629. We also have long-term debt of $3,796,148.***





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.





**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.




20




***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 2006, we paid $609,168 in insurance premiums to insure our motorcoaches
      ($76,833 of which was for policies prepaid through various dates in 2007) and
      $91,086 in insurance premiums for workers’ compensation insurance. In 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 workers’ 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 workers’ compensation
      insurance. During the fiscal years ending November 30, 2006 and 2005, we
      incurred $674,988 and $700,254, respectively, in insurance and workmen’s
      compensation expense. Motorcoach 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 2006 and 2007, 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.





**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, 63.22% of our outstanding common stock.
      Mr. Cheng, our Chief Executive Officer, owns 61.18% 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; and Jovi Chen, our Chief
      Operating Officer, 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.




21




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.





**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.***





Effective
      June 28, 2006, our common stock commenced quotation on the NASD Over-the-Counter
      Bulletin Board under the symbol BWCX.OB. We are optimistic that a market for
      our
      common stock will develop, however, there currently is no public market for
      our
      common stock, and no assurance can be given that a market will develop or that
      a
      shareholder ever will be able to liquidate his investment without considerable
      delay, if at all. If a market should develop, the price may be highly volatile.
      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.





***Our
      stock is a penny stock and there are significant risks related to buying and
      owning penny stocks.***





Rule
      15g-9 under the Securities Exchange Act of 1934 imposes additional sales
      practice requirements on broker-dealers that sell non-NASDAQ listed securities
      except in transactions exempted by the rule, including transactions meeting
      the
      requirements of Rule 506 of Regulation D under the Securities Act and
      transactions in which the purchaser is an institutional accredited investor
      (as
      defined) or an established customer (as defined) of the broker or dealer. For
      transactions covered by this rule, a broker-dealer must make a special
      suitability determination for the purchaser and have received the purchaser’s
      written consent to the transaction prior to sale. Consequently, this rule may
      adversely affect the ability of broker-dealers to sell our securities and may
      adversely affect your ability to sell any of the securities you
      own.





The
      Securities and Exchange Commission regulations define a "penny stock" to be
      any
      non-NASDAQ equity security that has a market price (as defined in the
      regulations) of less than $5.00 per share or with an exercise price of less
      than
      $5.00 per share, subject to some exceptions. For any transaction by a
      broker-dealer involving a penny stock, unless exempt, the rules require
      delivery, prior to any transaction in a penny stock, of a disclosure schedule
      prepared by the SEC relating to the penny stock market. Disclosure is also
      required to be made about commissions payable to both the broker-dealer and
      the
      registered representative and current quotations for the securities. Finally,
      monthly statements are required to be sent disclosing recent price information
      for the penny stock held in the account and information on the limited market
      in
      penny stocks. Our market liquidity could be severely adversely affected by
      these
      rules on penny stocks.




22




***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 13,750,000 shares of common stock, and currently
      have 13,730,000 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.





**ITEM
      7. FINANCIAL STATEMENTS.**





Our
      financial statements for the fiscal years ended November 30, 2006 and 2005,
      and
      the reports thereon of Child,
      Van Wagoner & Bradshaw, PLLC (formerly Child, Sullivan & Company), are included in this annual
      report.





23




**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 .
      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 subsequent
      periods. 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.





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. For more details regarding this change
      of auditors please see our current report on Form 8-K filed with the Securities
      and Exchange Commission on January 9, 2006.





**ITEM
      8A. CONTROLS AND PROCEDURES.**





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, as of the end of the
      period covered by this report on Form 10-KSB. 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, and that such information is accumulated and
      is
      communicated to our management, including our principal executive and principal
      financial officer, or persons performing similar functions, as appropriate,
      to
      allow timely decisions regarding required disclosure. Based on that evaluation,
      our management concluded that, as of November 30, 2006, 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 year
      covered by this report that has materially affected or is reasonably likely
      to
      materially affect, our internal control over financial reporting.




24




**ITEM
      8B. OTHER INFORMATION.**




None.





**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
            
            35
            
            President,
                Treasurer and Chairman of the Board of DirectorsVivian
                Cheng
            
            38
            
            Executive
                Vice President and DirectorJovi
                Chen
            
            30
            
            Chief
                Operating Officer, Vice President of Sales and Marketing and
                Director





*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.





*Jovi
      Chen* became a
      member of Bestway’s Board of Directors and was appointed as Bestway’s interim
      Chief Operating Officer and General Manager on October 30, 2006. Mr. Chen has
      served as the Company’s Vice President of Sales and Marketing since our
      inception in August 1997. Prior to joining the Company he served as Tour Manager
      of Bestway Tour & Travel Inc. from July 1995 to August 1997.




Each
      of
      the officers and directors named above devote 100% of their time to the business
      and affairs of the Company.





There
      are
      no agreements or understandings for any of our executive officers or directors
      to resign at the request of another person and no officer or director is acting
      on behalf of nor will any of them act at the direction of any other
      person.





To
      the
      best of our knowledge, except as set forth in our discussion below in
“ *Item
      12 - Certain Relationships and Related Transactions* ”,
      none
      of our directors, director nominees or executive officers has been involved
      in
      any transactions with us or any of our directors, executive officers, affiliates
      or associates which are required to be disclosed pursuant to the rules and
      regulations of the SEC. None of the directors, director designees or executive
      officers to our knowledge has been convicted in a criminal proceeding, excluding
      traffic violations or similar misdemeanors, or has been a party to any judicial
      or administrative proceeding during the past five years that resulted in a
      judgment, decree or final order enjoining the person from future violations
      of,
      or prohibiting activities subject to, federal or state securities laws, or
      a
      finding of any violation of federal or state securities laws, except for matters
      that were dismissed without sanction or settlement.




25




***Board
      Composition***




The
      board
      of directors is currently composed of 3 members, Mr. Cheng, Ms. Cheng and Mr.
      Chen. None of our directors are “independent” directors, as that term is defined
      under the Nasdaq listing standards.





***Duties
      of Directors***





Our
      directors have a duty of to act in good faith with a view to our interests.
      In
      fulfilling their duty of care to us, our directors must ensure compliance with
      our articles of incorporation. A stockholder has the right to seek damages
      if a
      duty owed by our directors is breached.




***Terms
      of Directors***





Our
      officers are elected by and serve at the discretion of the board of directors.
      Our directors are elected at the annual meeting of our stockholders and
      thereafter hold office until their resignation, removal, death or incapacity,
      or
      until their respective successors are duly elected and qualified.





***Committees
      and Meetings***




We
      currently do not have standing audit, nominating or compensation committees.
      Currently, our entire board of directors is responsible for the functions that
      would otherwise be handled by these committees. However, as our business expands
      and as we appoint others to our board of directors we expect that we will seek
      to establish an audit committee, a nominating committee and a compensation
      committee of the board of directors. We envision that the audit committee will
      be primarily responsible for reviewing the services performed by our independent
      auditors, evaluating our accounting policies and our system of internal
      controls. The nominating committee would be responsible for nomination of new
      director candidates and will be responsible for implementing our corporate
      governance policies and procedures. The compensation committee will be primarily
      responsible for reviewing and approving our salary and benefits policies
      (including stock options) and other compensation of our executive officers.
      Our
      board of directors has not made a determination as to whether any member of
      our
      board is an audit committee financial expert. Upon the establishment of an
      audit
      committee, the board will determine whether any of the directors qualify as
      an
      audit committee financial expert.




All
      Board
      action requires the approval of a majority of the directors in attendance at
      a
      meeting at which a quorum is present. During the fiscal year ended November
      30,
      2006, the Board held a total of 3 meetings. Each director attended 100 %
      of the
      total number of meetings of the Board.




***Director
      Compensation***




We
      have
      not paid our directors fees in the past for attending scheduled and special
      meetings of our board of directors. In the future, we may adopt a policy of
      paying independent directors a fee for their attendance at board and committee
      meetings. We do reimburse each director for reasonable travel expenses related
      to such director's attendance at board of directors and committee meetings.




26




***Family
      Relationships***




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





***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.





***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, 2006, all
      such filing requirements applicable to our officers and directors were complied
      with.





**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.


**Name
                  and Principal Position**
              
              **Year**
              
              **Salary**
                **($)**
              
              **Bonus**
                **($)**
              
              **Stock
                  Awards ($)**
              
              **Option
                  Awards ($)**
              
              **Non-**
                **Equity
                  Incentive Plan Compensation Earnings ($)**
              
              **Non-**
                **qualified
                  Deferred Compensation Earnings ($)**
              
              **All
                  Other**
                **Compensa-tion
                  ($)**(3)
              
              **Total**
                **($)**Wilson
                  Cheng
              
              
              2006
              
              $
              225,000
              
              
              N/A
              
              
              N/A
              
              
              N/A
              
              
              N/A
              
              
              N/A
              
              
              N/A
              
              $
              225,000Chairman
                and CEO
              
              
              2005
              
              $
              225,000
              
              
              N/A
              
              
              N/A
              
              
              N/A
              
              
              N/A
              
              
              N/A
              
              
              N/A
              
              $
              225,0002004
              
              $
              105,000
              
              
              N/A
              
              
              N/A
              
              
              N/A
              
              
              N/A
              
              
              N/A
              
              
              N/A
              
              $
              105,000




27




Narrative
      disclosure to summary compensation table




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.




***Outstanding
      Equity Awards at Fiscal Year End***




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.




***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.





***Indemnification
      of Directors and Executive Officers and Limitation of
      Liability***





Our
      Bylaws provide for the indemnification of our directors and officers, past,
      present and future, under certain circumstances, against attorney’s fees,
      judgments, fines and other expenses incurred by them in any litigation to which
      they become a party arising from their association with or activities on behalf
      of us. We will also bear expenses of such litigation for any of our directors,
      officers, employees or agents upon such persons promise to repay us therefor
      if
      it is ultimately determined that any such person shall not have been entitled
      to
      indemnification. This indemnification policy could result in substantial
      expenditure by us, which we may be unable to recoup.





Insofar
      as indemnification by us for liabilities arising under the Securities Exchange
      Act of 1934 may be permitted to our directors, officers and controlling persons
      pursuant to provisions of the Articles of Incorporation and Bylaws, or
      otherwise, we have been advised that in the opinion of the SEC, such
      indemnification is against public policy and is, therefore, unenforceable.
      In
      the event that a claim for indemnification by such director, officer or
      controlling person of us in the successful defense of any action, suit or
      proceeding is asserted by such director, officer or controlling person in
      connection with the securities being offered, we will, unless in the opinion
      of
      our counsel the matter has been settled by controlling precedent, submit to
      a
      court of appropriate jurisdiction the question whether such indemnification
      by
      us is against public policy as expressed in the Act and will be governed by
      the
      final adjudication of such issue.





At
      the
      present time, there is no pending litigation or proceeding involving a director,
      officer, employee or other agent of ours in which indemnification would be
      required or permitted. We are not aware of any threatened litigation or
      proceeding which may result in a claim for such
      indemnification.


28





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





The
      following table sets forth information regarding beneficial ownership of our
      common stock as of March 12, 2007 (i) by each person who is known by us to
      beneficially own more than 5% of our common stock; (ii) by each of our officers
      and directors; and (iii) by all of our officers and directors as a
      group.


Title
                  of Class
              
              Name
                  & Address of
                Beneficial
                  Owner
              
              Office,
                  If Any
              
              Amount
                  & Nature of Beneficial
                Ownership(1)
              
              Percent
                  of
                Class(2)**Officers
                  and Directors**Common
                Stock
                $0.001
                  par value
              
              
              Wilson
                  Cheng
                2
                  Mott Street
                New
                  York, New York 10013
              
              
              CEO
                  and Chairman
              
              
              8,400,000
              
              
              61.18
              %Common
                Stock
                $0.001
                  par value
              
              
              Vivian
                  Cheng
                2
                  Mott Street
                New
                  York, New York 10013
              
              
              Director
              
              
              200,000
              
              
              1.46
              %Common
                Stock
                $0.001
                  par value
              
              
              Jovi
                  Chen
                2
                  Mott Street
                New
                  York, New York 10013
              
              
              Director
              
              
              80,000
              
              
              0.58**5%
                  Share Holders**Common
                Stock
                $0.001
                  par value
              
              
              Wilson
                  Cheng
                2
                  Mott Street
                New
                  York, New York 10013
              
              
              CEO
                  and Chairman
              
              
              8,400,000
              
              
              61.18
              %Common
                Stock
                $0.001
                  par value
              
              
              Xu
                  Kexi
                14/D
                  De Cheng Building
                1436
                  Chang De Road
                Hong
                  Kong
              
              
              
              
              
              1,400,000
              
              
              10.20
              %**Officers
                  and Directors as a Group**Common
                  Stock
                $0.001
                  par value
              
              
              (3
                  persons named above)
              
              
              
              
              
              8,680,000
              
              
              63.22
              %




(1)
            Beneficial
                Ownership is determined in accordance with the rules of the Securities
                and
                Exchange Commission and generally includes voting or investment power
                with
                respect to securities. Each of the beneficial owners listed above
                has
                direct ownership of and sole voting power and investment power with
                respect to the shares of our common stock.




(2)
            A
                total of13,730,000shares of our Common Stock are considered to be outstanding pursuant
                to
                SEC Rule 13d-3(d)(1). For each Beneficial Owner above, any options
                exercisable within 60 days have been included in the
                denominator.




29




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





Mr.
      Cheng
      and his sister, Ms. Vivan Cheng, have made interest free loans to us during
      fiscal years 2006 and 2005. These loans aggregated $200,713 and $45,832 as
      of
      November 30, 2006 and 2005, respectively. These loans are not evidenced by
      any
      written instrument and they are therefore deemed payable upon demand. However,
      Mr. & Ms. Cheng have delivered us a written manifestation of their intention
      not to demand repayment of these amounts for at least the next twelve months.





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. There were $577,754 and $208,012 in notes payable to related parties
      as of November 30, 2006 and 2005, respectively.


30


**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]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]




31




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]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]




32




10.18
            
            Philadelphia
                Sub-Lease, dated January 20, 2006, between the Company and Apex Bus
                Company. [Incorporated by reference to Exhibit 10.18 to the Company’s
                Annual Report on Form 10-KSB filed with the SEC on March 15,
                2006]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, 2006
      and
      2005 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 $28,500 and $17,000, respectively.





***Audit-Related
      Fees***





There
      were no fees billed in the fiscal years ended November 30, 2006 and 2005 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.





***Tax
      Fees***





The
      aggregate fees billed in the fiscal years ended November 30, 2006 and 2005
      for
      professional services rendered by the principal accountant for tax compliance,
      tax advice and tax planning were $2,000 and $0, respectively.





***All
      Other Fees***





There
      were no other fees billed in the fiscal years ended November 30, 2006 and 2005
      for products or services provided by the principal accountant, other than the
      services reported above under other captions of this Item 14.




33





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





In
      January 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, 2006 and the quarterly reviews
      for the subsequent fiscal quarters of 2007 through the review for the quarter
      ended August 31, 2007, 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-).


34


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.





Date:
      March 15, 2007


**BESTWAY
                COACH EXPRESS INC.**By:
            /s/
              Wilson ChengWilson
                Cheng
              President
                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, 2007Wilson
                  Cheng/s/
                  Vivian Cheng
              
              Executive
                  Vice President
              
              March
                  15, 2007Vivian
                  Cheng
              
              and
                  Director/s/
                  Jovi Chen
              
              Chief
                  Operating Officer,
              
              March
                  15, 2007Jovi
                  Chen
              
              Vice
                  President of Sales and Marketing and Director




35


B ESTWAY C OACH E XPRESS I NC .





**FINANCIAL
      STATEMENTS**





November
      30, 2006 and 2005





BESTWAY
      COACH EXPRESS, INC.





FINANCIAL
      STATEMENTS





NOVEMBER
      30, 2006 and 2005





INDEX


Page
                  No.Report
                  of Independent Registered Public Accounting Firm
              
              F-2Balance
                  SheetsAs
                  of November 30, 2006 and 2005
              
              F-3
                  - F-4Statements
                  of OperationsFor
                  the years ended November 30, 2006 and 2005
              
              F-6Statements
                  of Changes in Stockholders’ DeficitFor
                  the years ended November 30, 2006 and 2005
              
              F-7Statements
                  of Cash FlowsFor
                  the years ended November 30, 2006 and 2005
              
              F-8
                  - F-9Notes
                  to the Financial Statements
              
              F-10
                  - F-21
  F-2





REPORT
      OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM




Board
      of
      Directors and Stockholders


Bestway
      Coach Express, Inc.


New
      York,
      NY





We
      have
      audited the accompanying balance sheets of Bestway Coach Express, Inc. (the
      Company) as of November 30, 2006 and 2005, and the related statements of
      operations, 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 of America). Those standards require
      that we plan and perform the audits to obtain reasonable assurance about whether
      the financial statements are free of material misstatement. The Company is
      not
      required to have, nor were we engaged to perform, an audit of its internal
      control over financial reporting. Our audits included consideration of internal
      control over financial reporting as a basis for designing audit procedures
      that
      are appropriate in the circumstances, but not for the purpose of expressing
      an
      opinion on the effectiveness of the Company’s internal control over financial
      reporting. Accordingly, we express no such opinion. An audit also includes
      examining, on a test basis, evidence supporting the amounts and disclosures
      in
      the financial statements, assessing the accounting principles used and
      significant estimates made by management, as well as evaluating the overall
      financial statement presentation. 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, 2006 and 2005, and the results of its operations and cash flows
      for
      the years then ended, in conformity with accounting principles generally
      accepted in the United States of America.





The
      accompanying financial statements have been prepared assuming that the Company
      will continue as a going concern. As discussed in Note 18 to the financial
      statements, the Company has incurred significant losses over the past two years,
      and is experiencing a decline in revenues. The Company’s current liabilities
      exceed current assets by $4,287,629, which raises concern regarding the
      Company’s ability to meet its obligations and to continue as a going concern.
      Management’s plans in regard to this matter are described in Note 18. The
      financial statements do not include any adjustments that might result from
      the
      outcome of this uncertainty.





Child,
      Van Wagoner & Bradshaw, PLLC


Salt
      Lake
      City, Utah


February
      28, 2007





F-3


BESTWAY
      COACH EXPRESS INC.





BALANCE
      SHEETS




November
                30,2006
            
            2005AssetsCurrent
                assetsCash
                and cash equivalents
            
            $
            1,575
            
            $
            7,706Trade
                accounts receivable, net (Note 4)
            
            
            96,775
            
            
            177,453Fuel
                tax receivable
            
            
            22,132
            
            
            80,158Inventories
                (Note 5)
            
            
            141,156
            
            
            122,080Prepaid
                expenses
            
            
            76,883
            
            
            101,470Total
                current assets
            
            
            338,521
            
            
            488,867Property
                and equipment (Note 6)Total
                property and equipment
            
            
            8,892,113
            
            
            8,848,737Less:
                accumulated depreciation and amortization
            
            
            (3,145,347
            )
            
            (2,603,380
            )Property
                and equipment, net
            
            
            5,746,766
            
            
            6,245,357Other
                assetsDeferred
                income taxes
            
            
            413,167
            
            
            -Deposits
                and other assets
            
            
            9,418
            
            
            7,958Total
                other assets
            
            
            422,585
            
            
            7,958Total
                assets
            
            $
            6,507,872
            
            $
            6,742,182Liabilities
                and Stockholders’ DeficitCurrent
                liabilitiesChecks
                drawn in excess of bank balance
            
            $
            139,473
            
            $
            35,799Current
                portion of notes payable - banks (Note 13)
            
            
            74,252
            
            
            73,250Current
                portion of motorcoach financing (Note 13)
            
            
            504,355
            
            
            697,294Current
                maturities of capitalized lease obligations (Note 7)
            
            
            698,969
            
            
            708,238Notes
                payable - related parties (Note 8)
            
            
            577,754
            
            
            208,012Payable
                to banks and credit card companies (Note 12)
            
            
            437,322
            
            
            294,746Accounts
                payable
            
            
            264,211
            
            
            236,825Payroll
                taxes payable
            
            
            637,917
            
            
            312,830Accrued
                expenses
            
            
            221,747
            
            
            217,081Customer
                deposits
            
            
            1,150
            
            
            1,850Accrued
                salaries - officers
            
            
            1,069,000
            
            
            932,000Total
                current liabilities
            
            
            4,626,150
            
            
            3,717,925Long-term
                liabilities, less current maturitiesCapitalized
                lease obligations, net of current portionand
                deferred refinance costs (Note 7)
            
            
            333,596
            
            
            704,595Notes
                payable - banks, net of current portion (Note 13)
            
            
            208,830
            
            
            279,662Motorcoach
                financing, net of current portion anddeferred
                guarantee costs (Note 13)
            
            
            3,053,009
            
            
            3,149,725Due
                to stockholders (Note 8)
            
            
            200,713
            
            
            45,832Deferred
                income taxes
            
            
            -
            
            
            76,437Total
                long-term liabilities
            
            
            3,796,148
            
            
            4,256,251Total
                liabilities
            
            
            8,422,298
            
            
            7,974,176Commitments
                and contingencies (Note 14)
            
            
            -
            
            
            -





F-4





BESTWAY
      COACH EXPRESS INC.





BALANCE
      SHEETS (CONT’D)





Liabilities
                and Stockholders’ Deficit (CONT’D)Stockholders’
                deficitCommon
                stock, $.001 par value**,**20,000,000
                shares authorized,13,750,000
                shares issued and 13,730,000 outstanding at Nov. 30, 2006,13,700,000
                issued and 13,680,000 outstanding at Nov. 30, 2005
            
            
            13,750
            
            
            13,700Expenses
                prepaid with common stock
            
            
            (12,500
            )
            
            -Additional
                paid-in-capital
            
            
            700,750
            
            
            625,800Retained
                deficit
            
            
            (2,614,426
            )
            
            (1,869,494
            )Total
                paid-in capital and retained deficit
            
            
            (1,912,426
            )
            
            (1,229,994
            )Less
                cost of treasury stock (20,000 shares) (Note 17)
            
            
            (2,000
            )
            
            (2,000
            )Total
                stockholders' deficit
            
            
            (1,914,426
            )
            
            (1,231,994
            )Total
                liabilities and stockholders’ deficit
            
            $
            6,507,872
            
            $
            6,742,182




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




F-5


BESTWAY
      COACH EXPRESS INC.





STATEMENTS
      OF OPERATIONS





For
                the Years Ended
              November
                30,2006
            
            2005Revenues
            
            $
            6,137,154
            
            $
            6,612,945Operating
                expenses
            
            
            5,681,100
            
            
            5,469,885Loss
                on trade-in of assets under capital lease (Note 13)
            
            
            -
            
            
            581,098Motorcoach
                depreciation attributable to change in estimate (Notes 6 &
                18)
            
            
            -
            
            
            376,773Gross
                profit
            
            
            456,054
            
            
            185,189General
                and administrative expenses
            
            
            1,100,797
            
            
            780,126Loss
                from operations
            
            
            (644,743
            )
            
            (594,937
            )Other
                income (expense)Interest
                income
            
            
            28
            
            
            8,059Other
                income
            
            
            11,520
            
            
            7,465Interest
                expense
            
            
            (601,341
            )
            
            (558,473
            )Total
                other income (expense)
            
            
            (589,793
            )
            
            (542,949
            )Loss
                before provision for taxes
            
            
            (1,234,536
            )
            
            (1,137,886
            )Provision
                for income tax benefit
            
            
            489,604
            
            
            458,931Net
                loss
            
            $
            (744,932
            )
            $
            (678,955
            )Loss
                per share - basic and diluted
            
            $
            (0.05
            )
            $
            (0.05
            )Weighted
                average number of shares used todetermine
                loss per share
            
            
            13,683,288
            
            
            13,700,000




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




F-6


BESTWAY
      COACH EXPRESS INC.





STATEMENTS
      OF CHANGES IN STOCKHOLDERS’ (DEFICIT)





For
      the
      Years Ended November 30, 2006 and 2005





ExpensesAdditional
            
            Prepaid
                with
            
            
            
            
            
            TotalCommon
                Stock
            
            Paid-In
            
            Common
            
            Treasury
            
            Retained
            
            Stockholders'Shares
            
            Amount
            
            Capital
            
            Stock
            
            Stock
            
            (Deficit)
            
            (Deficit)Balance
                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 stockfor
                guarantee (Note 17)
            
            
            2,000,000
            
            
            2,000
            
            
            98,000
            
            
            -
            
            
            -
            
            
            -
            
            
            100,000-Net
                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
            )Issuance
                of common stockfor
                services (Note 17)
            
            
            50,000
            
            
            50
            
            
            74,950
            
            
            (12,500
            )
            
            -
            
            
            -
            
            
            62,500Net
                loss
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            (744,932
            )
            
            (744,932
            )Balance
                at November 30, 2006
            
            
            13,730,000
            
            $
            13,750
            
            $
            700,750
            
            $
            (12,500
            )
            $
            (2,000
            )
            $
            (2,614,426
            )
            $
            (1,914,426
            )




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




F-7


BESTWAY
      COACH EXPRESS INC.





STATEMENTS
      OF CASH FLOWS




For
                the Years Ended
              November
                30,2006
            
            2005Cash
                flows from operating activities:Net
                income (loss)
            
            $
            (744,932
            )
            $
            (678,955
            )Adjustment
                to reconcile net loss to net cashprovided
                by operating activities:Depreciation
                and amortization
            
            
            541,967
            
            
            898,240Amortization
                of deferred refinance costs and guarantee
            
            
            35,754
            
            
            93,378Deferred
                income tax provision
            
            
            (489,604
            )
            
            (458,931
            )Shares
                issued for consulting services
            
            
            62,500
            
            
            -Loss
                on trade in of assets under capital lease
            
            
            -
            
            
            581,098Changes
                in operating assets and liabilities:Trade
                accounts receivable, net
            
            
            80,678
            
            
            69,532Fuel
                tax receivable
            
            
            58,026
            
            
            22,218Insurance
                proceeds receivable
            
            
            -
            
            
            117,605Inventories
            
            
            (19,076
            )
            
            (3,034
            )Prepaid
                expenses
            
            
            24,587
            
            
            6,660Deposits
                and other assets
            
            
            (1,460
            )
            
            24,194Accounts
                payable
            
            
            27,386
            
            
            (222,896
            )Payroll
                taxes payable
            
            
            325,087
            
            
            133,296Payable
                to banks and credit card companies
            
            
            142,576
            
            
            9,972Accrued
                expenses
            
            
            4,666
            
            
            (46,259
            )Customer
                deposits
            
            
            (700
            )
            
            (37,815
            )Accrued
                salaries - officers
            
            
            137,000
            
            
            68,272Net
                cash provided by operating activities
            
            
            184,455
            
            
            576,575Cash
                flows from investing activities:Purchase
                of property and equipment
            
            
            (43,376
            )
            
            (42,907
            )Net
                cash used in investing activities
            
            
            (43,376
            )
            
            (42,907
            )Cash
                flows from financing activities:Checks
                drawn in excess of bank balance
            
            
            103,674
            
            
            26,704Proceeds
                from notes payable - banks
            
            
            -
            
            
            100,000Principle
                payments on note payable - banks
            
            
            (69,830
            )
            
            (64,466
            )Principle
                payments on motorcoach financing
            
            
            (303,938
            )
            
            (106,123
            )Proceeds
                from notes payable - related parties
            
            
            1,270,473
            
            
            187,432Payment
                of notes payable - related parties
            
            
            (900,731
            )
            
            (270,920
            )Proceeds
                from due to stockholder
            
            
            677,801
            
            
            112,409Payment
                of due to stockholder
            
            
            (522,920
            )
            
            (124,072
            )Purchase
                of treasury stock
            
            
            -
            
            
            (2,000
            )Credit
                on trade-in of capital leases
            
            
            -
            
            
            113,651Repayment
                of capitalized lease obligations
            
            
            (401,739
            )
            
            (757,028
            )Net
                cash used in financing activities
            
            
            (147,210
            )
            
            (784,413
            )




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




F-8




BESTWAY
      COACH EXPRESS INC.





STATEMENTS
      OF CASH FLOWS (CONT’D)





Net
                decrease in cash and cash equivalents
            
            
            (6,131
            )
            
            (250,745
            )Cash
                and cash equivalents - beginning of year
            
            
            7,706
            
            
            258,451Cash
                and cash equivalents****-
                end of year
            
            $
            1,575
            
            $
            7,706**Supplemental
                Information:**Cash
                paid for interest
            
            $
            540,040
            
            $
            417,798Cash
                paid for income taxes
            
            $
            -
            
            $
            -




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





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.





No
      non-cash investing or financing activities were noted during the year ended
      November 30, 2006.




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


F-9




BESTWAY
      COACH EXPRESS INC.





NOTES
      TO
      FINANCIAL STATEMENTS





NOVEMBER
      30, 2006 and 2005





1.
            BASIS
                OF 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,
      Philadelphia, 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. 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.





The
      Company’s operations include a leased terminal and maintenance facility in
      Brooklyn, NY, a leased terminal in Long Island, NY, a leased apartment for
      motorcoach drivers in Philadelphia, 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, 1
      is owned by the Company, 11 are financed via long-term capitalized leases for
      a
      term of seven years and 11 are financed via a note payable with 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.





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.





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.






F-10


BESTWAY
        COACH EXPRESS INC.
 
 NOTES
        TO
        FINANCIAL STATEMENTS
 
 NOVEMBER
        30, 2006 and 2005




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





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, Philadelphia, 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.





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.




F-11




BESTWAY
        COACH EXPRESS INC.
 
 NOTES
        TO
        FINANCIAL STATEMENTS
 
 NOVEMBER
        30, 2006 and 2005




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





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.





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, 2006 and 2005, 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.





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 as incurred.
      Advertising expense of $65,352 related to the new Philadelphia interstate
      commuter service were incurred during the year ended November 30, 2006 and
      are
      included in general and administrative expenses. Advertising expense was not
      material for the year ended November 30, 2005.








F-12




BESTWAY
        COACH EXPRESS INC.
 
 NOTES
        TO
        FINANCIAL STATEMENTS
 
 NOVEMBER
        30, 2006 and 2005




3.
            CASH
                DEPOSITS





At
      November 30, 2006 and 2005, the carrying amounts of the Company’s cash deposits
      were $1,575 and $7,706, respectively. Bank balances were minimal and covered
      by
      federal depository insurance.





4.
            TRADE
                RECEIVABLES





Trade
      receivables are carried at original invoice amount. Trade receivables as of
      November 30, 2006
      and 2005 were $96,775 and $177,453, respectively, and of the total,
      95% **** and **** 85% **,** 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, 2006 and 2005,
      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:




2006
              
              2005Service
                  parts
              
              $
              136,431
              
              $
              117,355Fuel
              
              
              4,725
              
              
              4,725Total
              
              $
              141,156
              
              $
              122,080.080





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





6.
            PROPERTY
                AND EQUIPMENT





Property
      and equipment as of November 30 are as follows:




EstimatedUseful
                Lives
            
            2006
            
            2005(Years)Capitalized
                leased - motorcoaches
            
            
            7
            
            $
            8,380,874
            
            $
            8,349,122Leasehold
                improvements
            
            
            6
            
            
            316,507
            
            
            311,245Machinery
                and equipment
            
            
            5-7
            
            
            191,155
            
            
            184,793Furniture
                and fixtures
            
            
            7-10
            
            
            3,577
            
            
            3,5778,892,113
            
            
            8,848,737Less:
                Accumulated depreciation
              and
                amortization
            
            
            
            
            
            (3,145,347
            )
            
            (2,603,380
            )Total
            
            
            
            
            $
            5,746,766
            
            $
            6,245,357





Depreciation
      and amortization on property and equipment charged to expense was $541,967
      and
      $898,240 for the years ended November 30, 2006 and 2005, respectively.
      Accumulated amortization of capitalized leased assets totaled $2,265,635 and
      $2,061,369 at November 30, 2006 and 2005, respectively. Amortization expense
      for
      capitalized leases was $205,709 and $747,421 for the years ended November 30,
      2006 and 2005 respectively. Of the 2005 depreciation and amortization expense,
      $376,773 was due to a change in estimate of the motorcoaches’ useful lives (Note
      16). No additional impairment in accordance with SFAS #144 *,
      “Accounting for the Impairment or Disposal of Long-Lived
      Assets,”* was
      observed.




F-13


BESTWAY
          COACH EXPRESS INC.
 
 NOTES
          TO
          FINANCIAL STATEMENTS
 
 NOVEMBER
          30, 2006 and 2005


7.
            CAPITALIZED
                LEASE OBLIGATIONS





The
      Company leases 12 of its motorcoaches from various financing companies, one
      of
      which was paid off during the year ended November 30, 2006, resulting in title
      transferred to the Company. 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, 2006 of $42,604, net of $107,707
      accumulated amortization, are netted with the long-term capital lease obligation
      on the balance sheet.




**2006**
              
              **2005**Total
                  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.
              
              $
              1,075,169
              
              $
              1,476,908Less
                  deferred refinance costs
              
              
              (42,604
              )
              
              (64,075
              )Less
                  current maturities
              
              
              (698,969
              )
              
              (708,238
              )Long
                  term portion
              
              $
              333,596
              
              $
              704,595





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, 2006 and 2005,
      the
      amount of principal and interest in arrears totaled $143,364 and $82,062,
      respectively. In addition, the Company may be liable for penalties and other
      related charges. At November 30, 2006, 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 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 30,2007
            
            $
            698,9692008
            
            
            447,680Total
                capitalized lease obligations
            
            
            1,146,649Less
                amounts representing interest
            
            
            (71,480
            )Total
                present value of minimum lease payments
            
            
            1,075,169Less
                unamortized purchase option costs
            
            
            (42,604
            )Net
                lease obligation
            
            $
            1,032,565






F-14


BESTWAY
          COACH EXPRESS INC.
 
 NOTES
          TO
          FINANCIAL STATEMENTS
 
 NOVEMBER
          30, 2006 and 2005




8.
            RELATED
                PARTY TRANSACTIONS





DUE
      TO
      STOCKHOLDERS





Due
      to
      stockholders consists of unsecured non-interest bearing demand notes payable.
      There were $200,713 and $45,832 in due to stockholders as of November 30, 2006
      and 2005, respectively. The stockholders’ intention is to not demand for
      repayment of these notes for the next twelve months.





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 demand notes payable
      with no fixed terms of repayment. . There were $577,754 and $208,012 in notes
      payable - related parties as of November 30, 2006 and 2005,
      respectively..





9.
            MAJOR
                CUSTOMERS





The
      Company has several casino customers that provided revenues equivalent to 84%
      and 88% of total revenues for the years ended November 30, 2006 and 2005,
      respectively. 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 approximately 10% of the Company’s gross revenues during the years
      ended November 30, 2006 and/or 2005:




For
                the Years EndedNovember
                30,2006
            
            2005Customer
                A
            
            
            67
            %
            
            63
            %Customer
                B
            
            
            17
            %
            
            16
            %Customer
                C
            
            
            0
            %
            
            9
            %Total
            
            
            84
            %
            
            88
            %




F-15


BESTWAY
          COACH EXPRESS INC.
 
 NOTES
          TO
          FINANCIAL STATEMENTS
 
 NOVEMBER
          30, 2006 and 2005




10.
            OTHER
                INCOME





Other
      income received during the years ended November 30, 2006 and 2005 consisted
      mainly of $10,320 and $5,318 in fuel tax refunds.





11.
            INCOME
                TAXES





Income
      tax expense (benefit) consists of the following:




Year
                  Ended November 30,Current:
              
              2006
              
              2005Federal
              
              $
              -
              
              $
              -State
              
              
              -
              
              
              -Deferred:Federal
              
              $
              (427,877
              )
              $
              (401,565
              )State
              
              
              (61,727
              )
              
              (57,366
              )(489,604
              )
              
              (458,931
              )Total
              
              $
              (489,604
              )
              $
              (458,931
              )


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




Year
                  Ended November 30,2006
              
              2005Tax
                  at statutory rate of 35%
              
              $
              (432,088
              )
              $
              (398,260
              )Non-deductible
                  expenses
              
              
              -
              
              
              -State
                  income tax (benefit)
              
              
              (61,727
              )
              
              (57,366
              )Redetermination
                  of prior year tax liability
              
              
              4,211
              
              
              (3,305
              )Total
                  income tax
              
              $
              (489,604
              )
              $
              (458,931
              )




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:


2006
              
              2005Deferred
                  tax assets - Tax NOL
              
              $
              1,182,000
              
              $
              883,968Deferred
                  tax liabilities - Depreciation
              
              
              (768,833
              )
              
              (960,405
              )Net
                    deferred tax asset (liability) long-term
              
              $
              413,167
              
              $
              (76,437
              )





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.




F-16




BESTWAY
        COACH EXPRESS INC.
 
 NOTES
        TO
        FINANCIAL STATEMENTS
 
 NOVEMBER
        30, 2006 and 2005


11.
                INCOME
                    TAXES (CONT’D)





The
      Company has federal and state net operating loss carryforwards of approximately
      $2,955,000 expiring in the years 2018 through 2026. The tax benefit of these
      net
      operating loss carryforwards, based on an effective tax rate of 40% is
      approximately $1,1,82,000.





Annual
      fuel tax credits approximating $90,000, 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, 2006 and 2005, the Company had several lines of credit in place
      with its banks and credit card companies. The total borrowings outstanding
      at
      November 30, 2006 and 2005 were $437,322 and $294,746 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, 2006 and 2005, 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 $283,082 and $352,912 respectively,
      as follows:




November
                  30,2006
              
              2005Note
                  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.
              
              $
              70,202
              
              $
              71,022Note
                  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.
              
              
              47,477
              
              
              65,628
 F-17


BESTWAY
          COACH EXPRESS INC.
 
 NOTES
          TO
          FINANCIAL STATEMENTS
 
 NOVEMBER
          30, 2006 and 2005





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




November
                  30,2006
              
              2005Note
                  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.
              
              
              69,357
              
              
              99,196Note
                  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.
              
              
              8,919
              
              
              18,992Note
                  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.
              
              
              87,127
              
              
              98,074Total
                  notes payable
              
              
              283,082
              
              
              352,912Less
                  current portion
              
              
              (74,252
              )
              
              (73,250
              )Long-term
                  portion
              
              $
              208,830
              
              $
              279,662




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


For
                  the Year Ending
                November
                  30,2007
              
              $
              74,2522008
              
              
              67,6332009
              
              
              29,4132010
              
              
              17,0162011
              
              
              18,026Thereafter
              
              
              76,742Total
              
              $
              283,082




F-18




BESTWAY
          COACH EXPRESS INC.
 
 NOTES
          TO
          FINANCIAL STATEMENTS
 
 NOVEMBER
          30, 2006 and 2005




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





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 of $809,200 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 17). The guarantee is
      amortized as interest expense over the life of the loan. The deferred guarantee
      cost at November 30, 2006 of $78,575, net of $21,425 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:




Year
                  Ending November 30,2007
              
              $
              504,3552008
              
              
              434,8442009
              
              
              472,1072010
              
              
              512,5632011
              
              
              556,486Thereafter
              
              
              1,155,584Total
                  maturities
              
              
              3,635,939Less
                  deferred guarantee cost
              
              
              (78,575
              )Net
                  financing obligation
              
              $
              3,557,364




14.
            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, 2006 and 2005 were $181,720 and $195,639,
      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 30,2007
            
            $
            119,7202008
            
            
            114,0002009
            
            
            19,000Thereafter
            
            
            -Total
            
            $
            252,720





15.
            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,
      workers’ compensation, and other various liability claims. No material claims
      existed at November 30, 2006 or 2005.






F-19




BESTWAY
          COACH EXPRESS INC.
 
 NOTES
          TO
          FINANCIAL STATEMENTS
 
 NOVEMBER
          30, 2006 and 2005


16.
            CHANGE
                IN ESTIMATE





During
      the year ended November 30, 2005, 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.





17.
            STOCKHOLDERS’
                EQUITY (DEFICIT)




ISSUANCE
      OF COMMON SHARES FOR SERVICES





On
      July
      1, 2006, the Company entered into a consulting agreement (the Agreement) with
      an
      unrelated party (the Consultant), whereby the Consultant would be issued 100,000
      shares for services rendered during the period of July 1, 2006 to June 30,
      2007.
      In accordance with a Form S-8 filed with the Securities and Exchange Commission
      on November 3, 2007, the Company subsequently issued 50,000 of the shares to
      the
      Consultant on November 3, 2007 at a price of $1.50 per share. The price was
      based on the last sale of common stock reported on the OTC Bulletin Board as
      of
      a date within five business days prior to the filing of the Form S-8. Pursuant
      to the Agreement, the remaining 50,000 shares will be issued upon the conclusion
      of the Agreement’s term. The Company pro-rated the $75,000 total value of the
      shares issued, and recorded a consulting expense of $62,500 during the year
      ended November 30, 2006, and an expense prepaid with common stock of $12,500
      at
      November 30, 2006.





ISSUANCE
      OF COMMON SHARES FOR GUARANTEE





On
      June
      5, 2005, the Company issued to its President 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. 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, 2006 and 2005





17.
            STOCKHOLDERS’
                EQUITY (DEFICIT) (CONT’D)




PURCHASE
      OF 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.





18.
            GOING
                CONCERN CONSIDERATIONS





The
      accompanying financial statements have been prepared in conformity with
      accounting principles generally accepted in the United States of America, which
      contemplate continuation of the Company as a going concern. However, the
      Company’s current liabilities exceeded its current assets by $4,287,629 and
      $3,229,058 at November
      30, 2006 and 2005, respectively. Continuing losses could endanger
      the Company’s viability as a going concern. However, management anticipates that
      revenues generated in 2007 will provide enough working capital to fund all
      operations for 2007. In addition to increasing rates charged to customers,
      the
      Company has also launched a new Philadelphia commuter run that is expected
      to
      dramatically increase revenues. The Company does not expect to incur the same
      non-cash losses in 2007 as it did in 2006, 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 2007. Repairs and interest
      costs are also expected to decrease as a result of obtaining new
      motorcoaches.





The
      Company will continue to evaluate its projected expenditures relative to its
      available cash and to evaluate additional means of financing in order to satisfy
      its working capital and other cash requirements. The accompanying financial
      statements do not reflect any adjustments that might result from the outcome
      of
      these uncertainties.




F-21




**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]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]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. [Incorporated by reference to Exhibit 10.18 to the Company’s
                Annual Report on Form 10-KSB filed with the SEC on March 15,
                2006]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