CTNT 10-K & 10-Q changes, risk factors and insider trading
Cheetah Net Supply Chain Service Inc. · Nasdaq · Wholesale-Motor Vehicles & Motor Vehicle Parts & Supplies · CIK 1951667 · All filings on SEC.gov
At a glance
What changed in the latest 10-K
Risk Factors
Removed heading “If the PRC government imposes further restrictions and limitations on our PRC customers’ ability to transfer or distribute cash from the PRC to the U.S., our business, financial condition, and results of operations could be materially adversely affected.”
Removed heading “The dual class structure of our common stock has the effect of concentrating voting control with our Chief Executive Officer, and his interests may not be aligned with the interests of our other stockholders.”
Removed heading “Since we are deemed a “controlled company” within the meaning of the Nasdaq listing rules, we are allowed to follow certain exemptions from certain corporate governance requirements that could adversely affect our public stockholders.”
Largest changes
“Beginning in March 2025, following increases in U.S. tariffs on certain Chinese imports, the PRC government announced and implemented retaliatory measures against U.S.-origin goods. Effective March 10, 2025, the PRC imposed additional tariffs on a range of U.S. products, including agricultural commodities and other merchandise. In April 2025, China further escalated its response by increasing certain retaliatory tariff rates and implementing additional non-tariff measures, such as export controls, trade restrictions, and regulatory actions affecting U.S. companies and products. …”see in full comparison
“Recently, U.S. President Donald J. Trump announced that the U.S. would impose an additional 20% tariff on Chinese imports starting March 4, 2025. This announcement has undermined confidence in trade relations between China and the U.S. We are currently evaluating the overall impact of the recently imposed additional tariffs, including whether these regulations could materially and negatively affect our business.”see in full comparison
“If the PRC government imposes further restrictions and limitations on our PRC customers’ ability to transfer or distribute cash from the PRC to the U.S., our business, financial condition, and results of operations could be materially adversely affected.”see in full comparison
“Since we are deemed a “controlled company” within the meaning of the Nasdaq listing rules, we are allowed to follow certain exemptions from certain corporate governance requirements that could adversely affect our public stockholders.”see in full comparison
“The dual class structure of our common stock has the effect of concentrating voting control with our Chief Executive Officer, and his interests may not be aligned with the interests of our other stockholders.”see in full comparison
A number of U.S. federal and state laws and regulations affect our business and conduct, including, but not limited to, our sales, operations, financing, insurance, and employment practices. The regulatory bodies that regulate our business include the Federal Maritime Commission, the Consumer Financial Protection Bureau, the Federal Trade Commission, the United States Department of Transportation, the Occupational Safety and Health Administration, the Department of Justice, the Federal Communications Commission, various state consumer protection agencies, and various state financial regulatory agencies. For example, the exportation aspect of our business is subject to the Code of Federal Regulation’s requirements for exportation under 19 CFR § 192.2 and the inspection of Customs. Moreover, the Federal Maritime Commission issues licenses to qualified OTIs in the U.S. and requires that all OTIs be bonded or provide other proof of financial responsibility. See “Item 1. Business—Governmental Regulations.” Edward, a subsidiary of our Company, is currently the holder of an OTI license and is authorized to conduct business as an NVOCC, facilitating the transportation of cargo by water via common carriers between the U.S., its territories or possessions, and foreign countries. As we develop our logistics and warehousing services, Edward is required to renew this license every three years. Moreover, we may also be subject to laws and regulations involving taxes, tariffs, pricing, content protection, electronic contracts and communications, mobile communications, consumer protection, and information-reporting requirements, as well as privacy laws, anti-money laundering laws, and federal and state wage-hour, anti-discrimination, and other employment practices laws.see in full comparisonFor example, under the Immigration and Nationality Act, a foreign national is eligible for employment authorization in the U.S. only with an employment-related green card (permanent residency), an exchange visitor work and study visa, or a temporary (non-immigrant) worker visa, such as an H-1B visa. In particular, the H-1B visa is a nonimmigrant work visa that allows U.S. employers to hire foreign workers for specialty jobs that require a bachelor’s degree or equivalent. H-1B status can be granted initially for up to three years and can be extended for another three years. H-1B holders who reach that six-year maximum must leave the U.S. and remain outside for at least one year before being eligible for a new six years of H-1B. As of December 31, 2024, we had 13 full-time employees, including six foreign employees who do not have permanent work permits in the U.S. and currently work under H-1B visas or student visas. In the event that some of our employees’ temporary work permits expire, we may face increased turnover rates and labor shortages, which could result in higher labor costs. See “—Operational Risks—Our ongoing operations and growth may be affected by the high percentage of foreign employees who do not have permanent work permits in the U.S., which may increase our turnover ratio.”We are also subject to laws and regulations affecting public companies, including securities laws and exchange listing rules. Any failure to comply with these laws and regulations may result in the assessment of administrative, civil or criminal penalties, the imposition of investigatory remedial obligations or the issuance of injunctions limiting or prohibiting our operations.
Full comparison: every changed paragraph (16)
If the PRC government imposes further restrictions and limitations on our PRC customers’ ability to transfer or distribute cash from the PRC to the U.S., our business, financial condition, and results of operations could be materially adversely affected.
The PRC government has imposed controls on the convertibility of the RMB into foreign currencies and, in certain cases, the remittance of currency out of the PRC. For instance, the Circular on Promoting the Reform of Foreign Exchange Management and Improving Authenticity and Compliance Review, or “SAFE Circular 3,” issued on January 26, 2017, provides that banks shall, when dealing with dividend remittance transactions from a domestic enterprise to its offshore shareholders of more than $50,000, review the relevant board resolutions, original tax filing form, and audited financial statements of such domestic enterprise based on the principle of genuine transaction. There is no guarantee that the PRC government will not further intervene or impose other restrictions on our PRC customers’ ability to transfer or distribute cash outside the PRC. In the event that the foreign exchange control system prevents our PRC customers from remitting their payments to the U.S., we may not be able to receive a substantial portion of our revenue. As a result, our business, financial condition, and results of operations may be adversely affected.
We have discontinued our parallel-import vehicle sales business and are undergoing a transformation oftransforming our businessoperations model,to focus on logistics and warehousing services, which could have a material and adverse effect on our business, financial condition, and results of operations.
We arehave shiftingshifted our business focus from parallel-import vehicle sales to logistics and warehousing services. Since the second half of 2022, our parallel-import vehicle business has been negatively impacted by the COVID-19 pandemic, lockdowns in the PRC, and weaker customer demand in the PRC due to deteriorating macroeconomic conditions. DuringOn March 3, 2025, our board of directors formally approved the yeardiscontinuation endedof Decemberthe 31,parallel-import 2024,vehicle business. As a result of the discontinuation of this business line, we soldwill 14no vehicles,longer generatinggenerate revenue offrom $1.6vehicle million.sales Duringand thewill yearrely endedprimarily Decemberon 31,our 2023,logistics weand soldwarehousing 303services vehicles,for generatingfuture revenue of $38.3 million. In February 2024, we acquired Edward to expand our logistics and warehousing service operations. Beginning in the second quarter of 2024, we increased our marketing staff to pursue new business opportunities and to focus on international trades between the PRC and the U.S. In December 2024, we acquired TWEW to further expand our logistics services. TheseOur strategictransformation actionshas aresignificantly expectedaltered, and will continue to significantly alteralter, our revenue structurecomposition, cost structure, operational focus, and could,risk ifprofile. unsuccessful,If materiallywe are unable to successfully execute our business transformation, integrate acquired businesses, or achieve anticipated operational efficiencies and adversely affectsynergies, our business, financial condition, and results of operations.operations could be materially and adversely affected.
During the yearsyear ended December 31, 2024 and 2023,2024, we derived most of our revenue from a few customers. For the year ended December 31, 2024, our two largest clients accounted 87.7% and 12.3% of our total revenue, respectively. For the year ended December 31, 2023, our three largest clients accounted for 53.2%, 25.5%, and 20.2% of our total revenue, respectively. We can lose a major customer due to a variety of factors, including our inability to provide satisfying logistics and warehousing services. We cannot guarantee that we will continue to maintain business cooperation with these major customers at the same level or at all. Some of these major customers are engaged in the parallel-import vehicle business with us, a business we have discontinued. If any significant customer terminates its relationship with us, or if we are unable to find replacements for those who no longer work with us due to our business strategy shift, our business, financial condition, and results of operations could be materially and adversely affected.
The successful operation of our business depends on our ability to attract, motivate, and retain a sufficient number of skilled employees. From time to time, there may be a shortage of skilled labor in the logistics and warehousing industry in which we operate. As of December 31, 2024,2025, we had 1312 full-time employees, including sixfour foreign employees who currently do not have permanent work permits in the U.S. In the event that some of our employees’ temporary work permits expire, we may face increased turnover rates and labor shortages, which could result in higher labor costs. In this case, if we are unable to recruit and retain sufficiently qualified individuals, our business, results of operations, financial condition, and growth prospects could be materially and adversely affected.
A number of U.S. federal and state laws and regulations affect our business and conduct, including, but not limited to, our sales, operations, financing, insurance, and employment practices. The regulatory bodies that regulate our business include the Federal Maritime Commission, the Consumer Financial Protection Bureau, the Federal Trade Commission, the United States Department of Transportation, the Occupational Safety and Health Administration, the Department of Justice, the Federal Communications Commission, various state consumer protection agencies, and various state financial regulatory agencies. For example, the exportation aspect of our business is subject to the Code of Federal Regulation’s requirements for exportation under 19 CFR § 192.2 and the inspection of Customs. Moreover, the Federal Maritime Commission issues licenses to qualified OTIs in the U.S. and requires that all OTIs be bonded or provide other proof of financial responsibility. See “Item 1. Business—Governmental Regulations.” Edward, a subsidiary of our Company, is currently the holder of an OTI license and is authorized to conduct business as an NVOCC, facilitating the transportation of cargo by water via common carriers between the U.S., its territories or possessions, and foreign countries. As we develop our logistics and warehousing services, Edward is required to renew this license every three years. Moreover, we may also be subject to laws and regulations involving taxes, tariffs, pricing, content protection, electronic contracts and communications, mobile communications, consumer protection, and information-reporting requirements, as well as privacy laws, anti-money laundering laws, and federal and state wage-hour, anti-discrimination, and other employment practices laws. For example, under the Immigration and Nationality Act, a foreign national is eligible for employment authorization in the U.S. only with an employment-related green card (permanent residency), an exchange visitor work and study visa, or a temporary (non-immigrant) worker visa, such as an H-1B visa. In particular, the H-1B visa is a nonimmigrant work visa that allows U.S. employers to hire foreign workers for specialty jobs that require a bachelor’s degree or equivalent. H-1B status can be granted initially for up to three years and can be extended for another three years. H-1B holders who reach that six-year maximum must leave the U.S. and remain outside for at least one year before being eligible for a new six years of H-1B. As of December 31, 2024, we had 13 full-time employees, including six foreign employees who do not have permanent work permits in the U.S. and currently work under H-1B visas or student visas. In the event that some of our employees’ temporary work permits expire, we may face increased turnover rates and labor shortages, which could result in higher labor costs. See “—Operational Risks—Our ongoing operations and growth may be affected by the high percentage of foreign employees who do not have permanent work permits in the U.S., which may increase our turnover ratio.” We are also subject to laws and regulations affecting public companies, including securities laws and exchange listing rules. Any failure to comply with these laws and regulations may result in the assessment of administrative, civil or criminal penalties, the imposition of investigatory remedial obligations or the issuance of injunctions limiting or prohibiting our operations.
Beginning in March 2025, following increases in U.S. tariffs on certain Chinese imports, the PRC government announced and implemented retaliatory measures against U.S.-origin goods. Effective March 10, 2025, the PRC imposed additional tariffs on a range of U.S. products, including agricultural commodities and other merchandise. In April 2025, China further escalated its response by increasing certain retaliatory tariff rates and implementing additional non-tariff measures, such as export controls, trade restrictions, and regulatory actions affecting U.S. companies and products. In October 2025, the U.S. and the PRC announced a temporary trade understanding under which certain retaliatory tariffs and non-tariff measures were suspended or paused. However, these measures remain subject to change, and there can be no assurance that previously suspended tariffs will not be reinstated or that additional trade restrictions will not be imposed in the future. We are currently evaluating the overall impact of the recently imposed additional tariffs, including whether these regulations could materially and negatively affect our business.
Recently, U.S. President Donald J. Trump announced that the U.S. would impose an additional 20% tariff on Chinese imports starting March 4, 2025. This announcement has undermined confidence in trade relations between China and the U.S. We are currently evaluating the overall impact of the recently imposed additional tariffs, including whether these regulations could materially and negatively affect our business.
The dual class structure of our common stock has the effect of concentrating voting control with our Chief Executive Officer, and his interests may not be aligned with the interests of our other stockholders.
We have a dual-class voting structure consisting of Class A and Class B common stock. Under this structure, holders of Class A common stock are entitled to one vote per share of Class A common stock, and holders of Class B common stock are entitled to 15 votes per share of Class B common stock, which may cause the holders of Class B common stock to have an unbalanced, higher concentration of voting power. As of the date of this annual report, Mr. Huan Liu, our Chief Executive Officer and the sole stockholder of Class B common stock, beneficially owns 546,875 shares, or 100%, of our issued Class B common stock, representing approximately 75.4% of the voting rights in our Company. As a result, until such time as his voting power is below 50%, Mr. Huan Liu as the controlling stockholder has substantial influence over our business, including decisions regarding mergers, consolidations, and the sale of all or substantially all of our assets, election of directors, and other significant corporate actions. He may take actions that are not in the best interests of us or our other stockholders. These corporate actions may be taken even if they are opposed by our other stockholders. Further, such concentration of voting power may discourage, prevent, or delay the consummation of transactions that stockholders may consider favorable, including ones in which stockholders might otherwise receive a premium for their shares. Future issuances of shares of Class B common stock may also be dilutive to the holders of Class A common stock. As a result, the market price of our Class A common stock could be adversely affected.
Anti-takeover provisions in our fourth amended and restated articlescertificate of incorporation and our bylaws may discourage, delay, or prevent a change in control.
Some provisions of our fourth amended and restated articlescertificate of incorporation, which became effective on September 30, 2024,incorporation and our bylaws, which became effective on JulyFebruary 28,2, 2022,2026, may discourage, delay, or prevent a change in control of our Company or management that stockholders may consider favorable, including, among other things, the following:
Since we are deemed a “controlled company” within the meaning of the Nasdaq listing rules, we are allowed to follow certain exemptions from certain corporate governance requirements that could adversely affect our public stockholders.
As of the date of this annual report, our largest stockholder, Mr. Huan Liu, holds more than a majority of the voting power of our outstanding common stock shares and is able to determine all matters requiring approval by our stockholders. Under the Nasdaq listing rules, a company of which more than 50% of the voting power is held by an individual, group, or another company is a “controlled company” and is permitted to phase in its compliance with the independent committee requirements. Although we do not intend to rely on the “controlled company” exemptions under the Nasdaq listing rules even though we are deemed a “controlled company,” we could elect to rely on these exemptions in the future. If we were to elect to rely on the “controlled company” exemptions, a majority of the members of our board of directors might not be independent directors and our nominating and corporate governance and compensation committees might not consist entirely of independent directors. Accordingly, if we rely on the exemptions, during the period we remain a controlled company and during any transition period following a time when we are no longer a controlled company, you would not have the same protections afforded to stockholders of companies that are subject to all of the corporate governance requirements of Nasdaq.
In addition, Section 107 of the JOBS Act also provides that an “emerging growth company” can take advantage of the extended transition period provided in Section 7(a)(2)(B) of the Securities Act of 1933, as amended (the “Securities Act”) for complying with new or revised accounting standards. In other words, an “emerging growth company” can delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. We have elected to take advantage of the extended transition period for complying with new or revised accounting standards.
Management's Discussion & Analysis (MD&A)
New heading “Dissolution of Subsidiaries”
New heading “Recent Development”
New heading “Cost of Revenues”
New heading “Allowance of credit loss of accounts receivables”
Removed heading “Logistics and Warehousing”
Removed heading “Parallel-import Vehicles Segment”
Removed heading “Logistics and Warehousing Segment”
Removed heading “Accounts receivable, net”
Largest changes
“Management has evaluated the Company’s ability to continue as a going concern in accordance with ASC 205-40, Presentation of Financial Statements – Going Concern. This evaluation considered the Company’s current financial condition, expected cash flows, obligations due within the next 12 months, and available sources of liquidity.”see in full comparison
Net cash used in operating activities from continuing operations wassee in full comparison$3.5$2.5 million for the year ended December 31,2024.2025. The negative cash flow was primarily due to (i) a net loss of$3.2$3.6 million during the year ended December 31,2024;2025, (ii) an increase of$0.3$0.8 million indeferredotherincome tax benefits;receivables, and (iii)an increase of $0.3 million in other receivables anda decrease of$0.2$0.3 million in operating lease liabilities, partially offset by (iv) an increase of$0.3$0.7 million in allowance of impairment loss of goodwill and intangible assets, (v) an increase of $0.5 million in amortization of operating lease right-of-use assets,and(vi)$0.3$0.4 million in share-based compensationexpenses,expenses;respectively.and (vii) an increase of $0.4 million in other payables and other current liabilities.
“Management conducted an impairment assessment of goodwill and intangible assets associated with the Edward acquisition in accordance with ASC 350, Intangibles—Goodwill and Other. The Company utilized a DCF model to estimate the fair value of the reporting unit, taking into consideration projected revenues, operating margins, terminal value assumptions, and a discount rate reflecting the risks of the underlying cash flows.”see in full comparison
“For the year ended December 31, 2025, impairment loss expenses related to customer relationships, trade names, and goodwill amounted to $135,346, $27,429, and $568,532, respectively, resulting in total impairment losses of $731,307. No impairment losses were recorded for the year ended December 31, 2024. See NOTE 8 – Intangible Asset and Goodwill for more details.”see in full comparison
“While management understands that the ability of the Company to continue as a going concern is dependent upon its ability to successfully execute its new business strategy and eventually attain profitable operations, management has concluded that there are no conditions or events that raise substantial doubt about the Company’s ability to continue as a going concern for at least one year from the issuance date of these consolidated financial statements. Accordingly, the Company’s consolidated financial statements as of December 31, 2025 have been prepared on a going concern basis.”see in full comparison
“For the year ended December 31, 2025, the Company recorded a goodwill impairment charge of $568,532. See NOTE 8 – Intangible assets and Goodwill.”see in full comparison
Full comparison: every changed paragraph (106)
We are a provider of logistics and warehousing services, historically in connection with the sale of parallel-import vehicles sourced in the U.S. to be sold in the PRC market, and more recently for the transportation of other goods between the U.S. and the PRC. Parallel-import vehicles in the PRC refer to automobiles purchased directly from overseas markets and imported for sale outside of the brand manufacturers’ official distribution networks.
We are a provider of logistics and warehousing services, historically in connection with the sale of parallel-import vehicles sourced in the U.S. to be sold in the PRC market, and more recently for the transportation of other goods between the U.S. and the PRC. Parallel-import vehicles in the PRC refer to automobiles purchased directly from overseas markets and imported for sale outside of the brand manufacturers’ official distribution networks. This business contributed significantly to our revenue since our inception. Between 2016 and the first half of 2022, the Company experienced growth in sales volume and gross profit due to favorable market conditions. Since, beginningBeginning in the second half of 2023, the business was negatively affected by a decline in customer demand due to weakening macroeconomic conditions, price competition from luxury automakers in the PRC, and a shift in consumer preference toward domestic EVs. These market challenges led to a decline in parallel-import vehicle sales by 30.5% in 20232023, and a reduction in net income by 87.5% compared to 2022. The decline accelerated95.7% in 2024, with vehicle sales decreasingdeclining to 14 units in 2024 from 303 units in 2023 to 14 units in 2024, resulting in a 95.7% drop in revenue from $38.3 million in 2023 to $1.6 million in 2024.2023. In addition, the financial strain on the Company’s customers made it increasingly difficult to collect outstanding receivables. While the Company successfully recovered $4.0 million in 2024 and collected additional $2.5 million from the five aged accounts as of the date of the annual report, the remaining $1.6 million from two customers was determined to be uncollectible, as a result, the management recorded as a credit loss of $1.6 million for the year ended December 31, 2024.2024, due to the increasing difficulty in collecting outstanding receivables.
As market conditions continued to deteriorate and sales activity in the parallel-import vehicle segment ceased, onOn March 3, 2025, ourthe Company’s board of directors approved the discontinuation of ourthe Company’s parallel-import vehicle business. In accordance with ASC 205-20, Presentation of Financial Statements – Discontinued Operations, we determined that the parallel-import vehicle segment met the conditions for reporting as a discontinued operation. As a result, all financial results associated with this business have been reclassified as discontinued operations in the accompanying consolidated financial statements for all periods presented. For additional financial details regarding discontinued operations, refer to NoteNOTE 5 – Discontinued Operations.
The Company shifted its business focus since February 2024 by acquiring Edward to provide services related to international trades between the PRC and the U.S., and relocating its headquarter in July 2024 to Irvine, California, to utilize the ports of Los Angeles and Long Beach. The Company further expanded into labor and logistics service by acquiring TWEW in December 2024.
Logistics and Warehousing
In February 2024, we acquired Edward to expand our logistics and warehousing service operations. Beginning in the second quarter of 2024, we increased our marketing staff to pursue new business opportunities and focus on international trade flows between the PRC and the U.S.
In July 2024, we relocated our headquarters from Charlotte, NC, to Irvine, CA, which we believe will enable a stronger management focus on our logistics and warehousing business due to Irvine’s proximity to the important ports of Los Angeles and Long Beach.
In December 2024, we acquired TWEW, a California-based labor and logistics service provider which specializes in general labor support services and logistics coordination to further expand our logistics services.
As of the date of this annual report, we are actively integrating TWEW’s operations to strengthen our position in the logistics sector. Additionally, on December 19, 2024, we enteredacquired into a100% membership interest purchase agreement with Pingzheng Li, the then 100% owner of NexTrade, pursuanta toDelaware whichlimited weliability purchased the 100% membership interests in NexTradecompany for the consideration of $1. The transaction closed on the same day. As of the date of this annual report, NexTrade ishas not been engaged in any business operations.
Further, on March 28, 2025, we incorporated a wholly owned subsidiary, Cheetah BVI, in the British Virgin Islands. The incorporation of Cheetah BVI is intended to support our future international business development and facilitate potential global partnerships. As of the date of this annual report, Cheetah BVI has not commenced operations.
On September 30, 2024, our stockholders approved our fourth amended and restated articles of incorporation, which authorizes a reverse stock split of the issued shares of our common stock, par value $0.0001 per share, at a ratio ranging from 1-for-10 to 1-for-30, as determined at the discretion of our board of directors. On October 7, 2024, our board of directors approved a reverse stock split of our common stock at a ratio of 1-for-16. On October 21, 2024, we effectuated a reverse stock split of our common stock at a ratio of 1-for-16. Following such reverse split, each 16 shares of our common stock outstanding were automatically combined into one new share of common stock. No fractional shares were issued in connection with the reverse split; any fractional shares resulting from the reverse split were rounded up to the nearest whole share. The par value per share of our common stock remained unchanged. Our Class A common stock started trading on a post-split basis on October 24, 2024, at which time the Class A common stock was assigned a new CUSIP number (16307X202). On November 7, 2025, the Company’s stockholders approved the Company’s Fifth Amended and Restated Articles of Incorporation to affect a reverse stock split of the issued shares of the Company’s common stock at a ratio within a range from 1-for-5 to 1-for-20, as determined by the board of directors in its sole discretion. As of the date of this report, the board of directors has not yet determined the specific ratio or the timing of the implementation of such reverse stock split.
Dissolution of Subsidiaries
During the quarter ended June 30, 2025, the Company dissolved two wholly owned subsidiaries, Cheetah Net Logistics LLC and Pacific Consulting LLC, as part of an internal corporate restructuring. Both entities were previously organized under the laws of the State of New York and were formally dissolved on June 24, 2025.
Recent Development
On February 2, 2026, the Company completed its reincorporation from the State of North Carolina to the State of Delaware, and the rights of the Company’s stockholders became governed by Delaware law and the Company’s Delaware Certificate of Incorporation and Bylaws.
We reported a $5.2 million net loss for the year ended December 31, 2024. The loss was primarily driven by the wind-down of the discontinued parallel-import vehicle operations, increased operating expenses associated with our transition to logistics and warehousing services, and tax provisions related to deferred tax adjustments.
Loss from continuing operations for the years ended December 31, 2024 and 2023 were $3.2 million and $1.7 million, respectively.
Loss from discontinued operations, net of tax, was approximately $2.0 million in 2024, compared to income of $1.8 million in 2023, reflecting the financial impact of ceasing the parallel-import vehicle business, including associated costs and adjustments.
Revenues
In 2024,2025, our logistics and warehousing revenue came from the two newly acquired businesses, Edward and TWEW, with revenue recognition beginning after their respective acquisition dates.TWEW. The following table provides a breakdown of revenues from each entitiesentity:
For the year ended December 31, 2024,2025, we reported revenue of $455,805$1,288,536 from logistics and warehousing services segment, including $316,852,$214,810, or 69.5%16.7% of our total revenue followingfrom theEdward, acquisitionwhich ofwe Edwardacquired in February 2024, and $138,953,$1,073,726, or 30.5 %83.3% of our total revenue, followingfrom theTWEW, acquisitionwhich ofwe TWEWacquired in November 2024 (See also NoteNOTE 8).
Revenue from Edward decreased by 32.2% to $214,810 for the year ended December 31, 2025, compared to $316,852 for the year 2024. The decrease was primarily due to the lingering impact of trade war between China and the U.S., which resulted in reduced customer demand and shipment volume during the second half of 2025. Although trade flows stabilized following the resumption of trade negotiations between the two countries, shipment volume in 2025 did not return to the prior-year level due to continued uncertainty surrounding U.S.-China trade policy and more conservative ordering patterns by customers. The Company has taken proactive measures to navigate the business by increasing labor and logistics service business during the year 2025.
Revenue from TWEW increased substantially to $1,073,726 for the year ended December 31, 2025, compared to $138,953 for the year ended December 31, 2024. The increase was primarily attributable to a full year of logistics and warehousing services provided by TWEW in 2025. As TWEW was acquired in November 2024, only a limited amount of revenue was recognized in 2024 following the acquisition date.
Cost of Revenues
For the year ended December 31, 2025, total cost of revenues increased to $1,121,761 from $277,293 for the year ended December 31, 2024, representing an increase of $844,468, or 304.5%, primarily due to the contribution from TWEW. Cost of revenues attributable to TWEW was $996,662, representing 88.8% of total cost of revenues in year 2025.
Cost of revenues from Edward was $125,099, or 11.2% of total cost of revenues for the year ended December 31, 2025, compared to $148,588 for the same period in 2024, representing a decrease of $23,489, or 15.8%, consistent with the corresponding decline in revenue from Edward.
Cost of revenues is mainly labor costs for TWEW and ocean freight service costs for Edward.
General and administrative expenses for our continuing operations decreased by $14,287, or 0.4%, for the year ended December 31, 2025, primarily due to (i) a decrease of $138,319 in recruiting expenses as the prior-year period included significant hiring expenses associated with the launch of our logistics and warehousing segment, (ii) a decrease of $78,351 in insurance expenses resulting from a less expensive insurance provider, (iii) a decrease of $66,290 in legal and accounting fees as we incurred additional professional fees for preparing registration statements on Form S-3 and Form S-8 during the year ended December 31, 2024, (iv) a decrease of $14,657 in travel and entertainment expenses related to business development efforts and client engagement, and (v) a decrease of $10,776 in other miscellaneous general and administration expenses during the year ended December 31, 2025, partially offset by (vi) an increase of $201,375 in rental and leases, which was primarily due to the relocation of our headquarters to California in July 2024, (vii) an increase of $66,926 in depreciation and amortization expenses, primarily due to the acquisition of new fixed assets and additional intangible assets, as detailed in NOTES 6 & 8, and (ⅷ) an increase of $30,938 in payroll and benefits expense, which was reflecting the full-year impact in 2025 of personnel hired during mid-2024 to support the Company’s newly launched logistics and warehousing and labor services segments.
Management conducted an impairment assessment of goodwill and intangible assets associated with the Edward acquisition in accordance with ASC 350, Intangibles—Goodwill and Other. The Company utilized a DCF model to estimate the fair value of the reporting unit, taking into consideration projected revenues, operating margins, terminal value assumptions, and a discount rate reflecting the risks of the underlying cash flows.
For the year ended December 31, 2025, impairment loss expenses related to customer relationships, trade names, and goodwill amounted to $135,346, $27,429, and $568,532, respectively, resulting in total impairment losses of $731,307. No impairment losses were recorded for the year ended December 31, 2024. See NOTE 8 – Intangible Asset and Goodwill for more details.
General and administrative expenses for our continuing operations increased by $1.4 million, or 66.3%, to $3.6 million for the year ended December 31, 2024 from $2.2 million for the year ended December 31, 2023, primarily due to (i) an increase of $0.5 million in personnel-related expenses which was attributed to the hiring of additional staff to support the newly launched logistics and warehousing segment, and labor services segment, (ii) an increase of $0.3 million in rental and leases following the acquisition of Edward with the addition of a new office workspace in California, (iii) an increase of $0.1 million in recruiting expenses associated with the development of new business lines, aligning with the Company’s strategic shift towards logistics and warehousing, (iv) an increase of $0.2 million in insurance expenses due to higher costs associated with directors and officers insurance, (v) an increase of $0.1 million in depreciation and amortization expenses, primarily due to the acquisition of new fixed assets and additional intangible assets, as detailed in Notes 6 & 8, and (vi) an increase of $0.2 million in other miscellaneous general and administration expenses during the year ended December 31, 2024.
Share-based compensation expenses were $0.3 million$387,618 and nil$277,345 for the years ended December 31, 20242025 and 2023,2024, respectively.respectively, representing an increase of $110,273, or 39.8%.
Share-based compensation expenses of $387,618 were recognized during the year ended December 31, 2025, consisting of (i) $77,875 resulting from 43,750 shares granted and vested immediately on September 30, 2025, (ii) $39,023 related to the employee incentive plan shares granted on September 30, 2024, and (iii) $270,720 resulting from the newly issued 144,000 shares granted and vested immediately on October 15, 2025.
For the year ended December 31, 2024, share-based compensation expenses were $277,345, consisting of $261,666 from (i) the 150,000 shares granted and vested immediately on September 30, 2024, and (ii) $15,679 related to the employee incentive plan shares granted on September 30, 2024.
See NOTE 11 – Stock Based Compensation for more details.
On August 16, 2024, our board of directors approved the adoption of the Amended and Restated 2024 Stock Incentive Plan (the “Plan”). Subsequently, on September 30, 2024, our stockholders approved the Plan. The total number of shares granted by the compensation committee of our board of directors on September 30, 2024 were 150,000, including 118,750 shares of Class A common stock and 31,250 shares of Class B common stock. Share-based compensation expenses of $277,345 were recognized during the year ended December 31, 2024. See Note 11 for more details.
Interest income from continuing operations was $924,224 for the year ended December 31, 2025, compared to $320,472 for the year ended December 31, 2024, compared to $9,938 for the year ended December 31, 2023, representing an increase of $310,534,$603,752, or 3,124.7%.188.4%. The significant increase was primarily driven by interest earned on short-term loan receivablesreceivable and certificates of deposit, funded by the net proceeds from ourthe IPO,Company’s thepublic offerings closed in May Offering, and the July Offering.2024.
Interest expense incurred from our continuing operations was $35,951$33,198 for the year ended December 31,2024,31, decreased2025, $5,932a decrease of $2,753, or 14.2%,7.7%, from $41,883$35,951 in 2023,2024, mainly due to decreased creditloan cardinterest interest.expense.
Other income, net was $54,763 for the year ended December 31, 2025, compared to $8,009 for the year ended December 31, 2024, representing an increase of $46,754, or 583.8%. The increase was primarily attributable to higher rental income recognized during the year ended December 31, 2025.
Our income tax benefitsprovision for continuing operations werewas $0.2 million$15,916 for the year ended December 31, 2024,2025, compared with income tax benefits of approximately $0.5$215,822 for the same period in 2023.2024.
As a result of the above factors, we had a net loss of $3.2$3.6 million from our continuing operations for the year ended December 31, 2024,2025, compared to a net loss of $1.7$3.2 million for the same period of 2023.2024.
The following table summarizes the financial results of our discontinued operations for the yearsyear ended December 31, 2024 and 2023:
Revenue from discontinued operations was $1.6 million for the year ended December 31, 2024 from the parallel-vehicle business. Only 14 units of vehicles were sold following the significant downturn of parallel-import vehicle business as described in “—Business Overview and Recent Developing Trends.”
We also reported cost of revenue of $1.7 million, mainly the fulfillment expenses, and a gross loss of $24,820 of the discontinued business for the year ended December 31, 2024.
Revenue from discontinued operations was $1.6 million for the year ended December 31, 2024, compared to $38.3 million for the year ended December 31, 2023, representing a decrease of $36.7 million, or 95.7%. The significant decline was primarily due to the termination of parallel-import vehicle sales and the phase-out of operations. Revenue from the U.S. domestic market declined by 97.5% to $0.2 million, while revenue from the overseas market decreased by 95.3% to $1.4 million in 2024.
Cost of revenue decreased by $32.4 million, or 95.0%, to $1.7 million in 2024, compared to $34.1 million in 2023, primarily due to the substantial reduction in vehicle purchases and fulfillment expenses following the discontinuation of the business. The cost of vehicles decreased by $30.7 million, or 95.3%, while fulfillment expenses declined by $1.7 million, or 92.5%, in line with lower sales volumes.
As a result, we reported a gross loss of $24,820 for the year ended December 31, 2024, compared to a gross profit of $4.2 million in 2023, reflecting a decline of $4.3 million, or 100.6%. The decrease was primarily attributable to the cessation of the parallel-import vehicle business and the significant drop in revenue.
The following table presents selling, general, and administrative expenses (“SGA Expenses”) expenses for the discontinued operations:
Total SGA Expenses for the discontinued parallel-import vehicle business were approximately $1.8 million for the year ended December 31, 2024.
Allowance of credit loss of accounts receivables
Total allowance of credit loss of accounts receivable for the discontinued parallel-import vehicle business was $1,589,546 for the year ended December 31, 2024.
Total SGA Expenses for the discontinued parallel-import vehicle business increased by approximately $1.2 million, or 175.8%, to $1.8 million in 2024, compared to $0.7 million in 2023. The increase was primarily driven by credit losses of $1.6 million for aged uncollectible accounts receivable, and $0.1 million of forfeited vehicle deposits and sales tax receivables, reflecting the financial impact of the business exit.
However, in the second half of 2024, certain customers were impacted by broader economic pressures, resulting in slower payment cycles and delays in remittances. These challenges were reflected in our financial performance, as we recorded a credit loss of $1.6 million on accounts receivable and a credit loss of $34,885 on vehicle-related sales tax receivables. Additionally, we recognized a forfeited vehicle deposit expense of $100,800, primarily due to supplier-related contract terminations following the cessation of vehicle purchases.
We remain focused on optimizing collections and has implemented a structured approach to manage outstanding receivables. Through ongoing efforts, we have recovered $2.5 million as of the date of this annual report. We continue to monitor and evaluate outstanding balances to maximize recoverability and ensure a disciplined financial transition from the vehicle import business. For further details on credit losses, refer to Note 5 – Discontinued Operations.
The table below presents interest expenses for the yearsyear ended December 31, 2024 and 2023:
Total interest expenses for the discontinued operations were $88,788 for the year ended December 31, 2024.
Total interest expenses for the discontinued operations decreased significantly to $ 88,788 for the year ended December 31, 2024, compared to $1.2 million in 2023. This decrease was primarily due to the cessation of vehicle purchases and the associated financing activities. The absence of inventory financing and a substantial decrease in LC financing charges were the main causes of this decline.
Historically, our primary uses of cash have been to finance working capital needs. We believe that we will be able to fund current operations and other commitments for at least the next 12 months from operating cash flow and proceeds from the capital infusioninfusion, which were held in our cash and cash equivalents.
As of December 31, 2024,2025, we had current assets of $11.0$9.1 million, consisting of cash and cash equivalents of $1.7$0.2 million, $6.1$7.4 million in loan receivables,receivable, $0.4$1.2 million of other receivables, $0.3$0.2 million in prepaid expenses and other current assets from continuing operations, as well as $2.5 million in current assets from discontinued operations, primarily accounts receivable, which had been fully collected as of the date of this report.operations. As of December 31, 2024,2025, our current liabilities, all of which related to continuing operations, totaled approximately $0.9$1.3 million, consisting of $0.4$0.6 million of operating lease liabilities, $0.2$0.6 million of other payables, and $0.2$0.1 million of loanloans payable, including the current portion of long-term borrowings.
Net cash used in operating activities from continuing operations was $3.5$2.5 million for the year ended December 31, 2024.2025. The negative cash flow was primarily due to (i) a net loss of $3.2$3.6 million during the year ended December 31, 2024;2025, (ii) an increase of $0.3$0.8 million in deferredother income tax benefits;receivables, and (iii) an increase of $0.3 million in other receivables and a decrease of $0.2$0.3 million in operating lease liabilities, partially offset by (iv) an increase of $0.3$0.7 million in allowance of impairment loss of goodwill and intangible assets, (v) an increase of $0.5 million in amortization of operating lease right-of-use assets, and(vi) $0.3$0.4 million in share-based compensation expenses,expenses; respectively.and (vii) an increase of $0.4 million in other payables and other current liabilities.
What changed in the latest 10-Q
Risk Factors
As a smaller reporting company, we are not required to provide the information required by this item. You are encouraged to read the risk factors set forth in our Annual Report on Form 10-K for the year ended December 31, 2025, filed with the SEC on March 20, 2026.
Removed heading “Our investment in a PRC venture capital fund may cause us to be deemed an investment company under the Investment Company Act of 1940, which could materially and adversely affect our business, financial condition and results of operations.”
Largest changes
“Our investment in a PRC venture capital fund may cause us to be deemed an investment company under the Investment Company Act of 1940, which could materially and adversely affect our business, financial condition and results of operations.”see in full comparison
“On January 6, 2026, Naiside entered into a partnership agreement with Shanghai Kesheng Investment Management Co., Ltd., as general partner and executive partner, in connection with Naiside’s participation as a limited partner in a venture capital investment fund in the PRC. Pursuant to the partnership agreement, Naiside subscribed for a 7.0% limited partnership interest and made a capital commitment of approximately US$40.0 million to the venture capital fund. …”see in full comparison
“Registration as an investment company would subject us to a comprehensive regulatory regime that is inconsistent with our intended business strategy and operations, including restrictions on our capital structure, leverage, issuance of securities, transactions with affiliates, custody of assets, governance, reporting obligations, and the manner in which we conduct our business. …”see in full comparison
“As a result of this investment, a significant portion of our assets may consist of securities or interests in a venture capital fund. We do not intend to become an “investment company” as defined under the Investment Company Act of 1940, as amended. However, depending on the composition and value of our assets, including the value of our limited partnership interest in the venture capital fund, and the manner in which our business and investment activities are conducted, we may be deemed to be an investment company under the Investment Company Act. …”see in full comparison
As a smaller reporting company, we are not required to provide the information required by this item. You are encouraged to read the risk factors set forth in our Annual Report on Form 10-K for the year ended December 31, 2025, filed with the SEC on March 20, 2026.see in full comparisonIn addition, during the quarterly period ended March 31, 2026, the risks described below have newly arisen or become material, and you are encouraged read them together with the risk factors set forth in our Annual Report on Form 10-K for the year ended December 31, 2025.
Full comparison: every changed paragraph (5)
As a smaller reporting company, we are not required to provide the information required by this item. You are encouraged to read the risk factors set forth in our Annual Report on Form 10-K for the year ended December 31, 2025, filed with the SEC on March 20, 2026. In addition, during the quarterly period ended March 31, 2026, the risks described below have newly arisen or become material, and you are encouraged read them together with the risk factors set forth in our Annual Report on Form 10-K for the year ended December 31, 2025.
Our investment in a PRC venture capital fund may cause us to be deemed an investment company under the Investment Company Act of 1940, which could materially and adversely affect our business, financial condition and results of operations.
On January 6, 2026, Naiside entered into a partnership agreement with Shanghai Kesheng Investment Management Co., Ltd., as general partner and executive partner, in connection with Naiside’s participation as a limited partner in a venture capital investment fund in the PRC. Pursuant to the partnership agreement, Naiside subscribed for a 7.0% limited partnership interest and made a capital commitment of approximately US$40.0 million to the venture capital fund. On January 29, 2026, Naiside made a capital contribution of US$40,131,287 to the venture capital fund in accordance with the partnership agreement. The venture capital fund is intended to invest primarily in China-based companies engaged in logistics technology, compliance technology, and supply chain technology and services, particularly companies that provide products or services to customers in the United States and European markets. The venture capital fund will focus primarily on companies at venture capital stages, with each individual portfolio investment generally ranging from approximately US$0.7 million to US$7.0 million. The general partner is responsible for the execution of the partnership’s affairs.
As a result of this investment, a significant portion of our assets may consist of securities or interests in a venture capital fund. We do not intend to become an “investment company” as defined under the Investment Company Act of 1940, as amended. However, depending on the composition and value of our assets, including the value of our limited partnership interest in the venture capital fund, and the manner in which our business and investment activities are conducted, we may be deemed to be an investment company under the Investment Company Act. In particular, if our investment securities were to exceed applicable thresholds under the Investment Company Act and we were unable to rely on an available exemption, exclusion or other relief, we could be required to register as an investment company.
Registration as an investment company would subject us to a comprehensive regulatory regime that is inconsistent with our intended business strategy and operations, including restrictions on our capital structure, leverage, issuance of securities, transactions with affiliates, custody of assets, governance, reporting obligations, and the manner in which we conduct our business. Compliance with these requirements could be costly and burdensome and could require us to materially alter our business strategy, dispose of certain assets, restructure or unwind our investment in the venture capital fund, or limit our ability to pursue strategic transactions or other business opportunities. If we were deemed to be an investment company and failed to register or qualify for an exemption, exclusion or other relief, we could be subject to regulatory enforcement actions, monetary penalties, restrictions on our operations and adverse consequences with respect to our contracts and securities offerings. Any of the foregoing could materially and adversely affect our business, financial condition, results of operations and the market price of our securities.
Management's Discussion & Analysis (MD&A)
New heading “Continuing Operations- International Trading”
New heading “Continuing Operations - Corporate Unallocated Operating Adjustments”
New heading “Comparison of the Six Months Ended June 30, 2026 and 2025”
New heading “Continuing Operations-Logistics and Warehousing Services”
New heading “Continuing Operations- International Trading”
New heading “Continuing Operations- Corporate Unallocated Operating Adjustments”
New heading “Other Income (Expenses), net”
New heading “Income Tax (Benefits)”
New heading “Discontinued Operations -Parallel- Import vehicle Business”
New heading “The 2026 ATM Offering”
Removed heading “Operating Expenses”
Removed heading “General and Administrative Expenses”
Largest changes
Revenue from TWEW decreased bysee in full comparison87.3%100.0% to$53,000$nil for the three months endedMarchJune31,30, 2026, compared to$417,284$301,442 for the same period in 2025, primarily due to tighter U.S. immigration policies, which increased labor costs and constrained labor availability, as well as unfavorable market conditions that reduced customer demandfollowing changesintariffthepolicieslogisticsinand2025.warehousing industries.
General and administrative expenses for the Company’s continuingsee in full comparisonoperationsoperations-decreasedcorporate unallocated operating adjustments segment increased by$230,515,$159,135, or 23.0%, to$770,004$850,780 for the three months endedMarchJune31,30, 2026 from$1,000,519$691,645 for the three months endedMarchJune31,30, 2025. Thedecreaseincrease was mainly due to (i)aandecreaseincrease of$165,038$221,728inof other administration expenses during the three months ended June 30, 2026, primarily due to consulting fee for disposal of Edward and acquisition of Super International, (ii) an increase of $46,586 of legal and accounting feesasduewetorecordedadditional legal fees incurred in connection with theaccountingreversefeestockforsplit,annual(iii)auditanforincreaseFiscalofYear 2024$35,206 inthetravelfirstandquarterentertainment expenses as part of2025,business development efforts and client engagement, partially offset by (iiiv) a decrease of$75,908$90,289 in payroll and benefits expense due to staff optimization and cost-savingmeasures,measure, (iiiv) a decrease of28,280$29,976 in rental and leases, primarily due to the termination of one of the Company’s office leases, and (ivvi) a decrease of$15,572$20,189 in insurance expenses resulting from a change in our insuranceprovider, (v) a decrease of $10,370 in travel and entertainment expenses during the three months ended March 31, 2026, as the Company reduced discretionary spending and maintained tighter controls over non-essential expenses, (vii) a decrease of $4,560 in depreciation and amortization expenses, as we did an impairment loss on intangible assets in 2025, partially offset by (vi) an increase of $1,862 in recruiting expenses, and (ⅷ) an increase of $67,351 of other miscellaneous general and administration expenses during the three months ended March 31, 2026, primarily due to the increase of other profession fee for TWEW.provider.
“Continuing Operations - Corporate Unallocated Operating Adjustments”see in full comparison
“Continuing Operations- Corporate Unallocated Operating Adjustments”see in full comparison
Full comparison: every changed paragraph (89)
We are engaged in two principal business areas: (i) logistics and warehousing and (ii) international trading. Our logistics and warehousing business includes logistics coordination, warehousing and general labor support services. Following our acquisition of Super International in May 2026, we also commenced the international trading of large-scale industrial equipment. Through Super International, we source, purchase and sell large-scale industrial equipment in international markets and coordinate related procurement, sales and delivery arrangements. Our international trading business operates alongside our logistics and warehousing business and is intended to diversify our business operations and revenue sources.
WeHistorically, are a provider ofour logistics and warehousing services,business historicallyprimarily involved services provided in connection with the sale of parallel-import vehicles sourced in the U.S. tofor be soldsale in the PRC market,market. More recently, through Edward, we expanded our logistics and morewarehousing recentlybusiness forto include the transportation of other goods between the U.S. and the PRC. Parallel-import vehicles in the PRC refer to automobiles purchased directly from overseas markets and imported for sale outside of the brand manufacturers’ official distribution networks.
Between 2016 and the first half of 2022, the Company experienced growth in sales volume and gross profit due to favorable market conditions. Beginning in the second half of 2023, the business was negatively affected by a decline in customer demand due to weakening macroeconomic conditions, price competition from luxury automakers in the PRC, and a shift in consumer preference toward domestic EVs. These market challenges led to a declinedeclines in parallel-import vehicle sales byof 30.5% in 2023,2023 and 95.7% in 2024, with vehicle sales declining to 14 units in 2024 from 303 units in 2023. In addition, the Company recorded a credit loss of $1.6 million for the year ended December 31, 2024, due to the increasing difficulty in collecting outstanding receivables.
The Company shiftedbegan its logistics and warehousing business focus sincein February 2024 by acquiring Edward to provide services related to international tradestrade between the PRC and the U.S.,U.S. andIn relocatingJuly 2024, the Company relocated its headquarter in July 2024headquarters to Irvine, California, to utilize the ports of Los Angeles and Long Beach. The Company further expanded intoits laborlogistics and logisticswarehousing servicebusiness by acquiring TWEW in December 2024. Following the disposition of Edward in April 2026, the Company continues to conduct its logistics and warehousing business through TWEW. Following the acquisition of Super International in May 2026, the Company also directly engages in international trading of large-scale industrial equipment. Accordingly, the Company currently operates both its logistics and warehousing business and its international trading business.
Additionally, on December 19, 2024, we acquired 100% of the membership interestinterests ofin NexTrade, a Delaware limited liability companycompany, for the consideration of $1. NexTrade holds 100% of the ownership interests in Naiside (Shenzhen) International Trading Co., Ltd. As of the date of this quarterly report, NexTrade itself has not beendirectly engagedconducted any material business operations other than holding its ownership interest in any business operations.Naiside.
On February 12, 2026, the Company closed the previously disclosed private placement pursuant to certain stock purchase agreements dated January 27, 2026, the Company entered into stock purchase agreements with certain investors forand the sale ofissued an aggregate of 167,250 shares of Class A commonCommon stockStock, after giving retroactive effect to the 2026 Reverse Stock Split, for aggregate gross proceeds of approximately $40.14 million in a private placement pursuant to Regulation S under the Securities Act of 1933, as amended (the “Securities Act”). The private placement closed on February 12, 2026.
On February 2, 2026, we effected a change in our state of incorporation from the State of North Carolina to the State of Delaware by filing the applicable Articles of Conversion with the Secretary of State of the State of North Carolina the applicable Article of Conversion and by filing with the Secretary of State of the State of Delaware the Delaware Certificate of Conversion and the Delaware Certificate of Incorporation.Incorporation with the Secretary of State of the State of Delaware.
On March 25, 2026, we entered into a Stock Purchase Agreement with Bing Shao, a non-U.S. individual, and Edward, pursuant to which we agreed to sell, assign, transfer,transfer and deliver to Bing Shao 100% of the shares of common stock of Edward for an aggregate purchase price of $20,000. On April 1, 2026, the transactionCompany wascompleted closed.the disposition of Edward pursuant to the Stock Purchase Agreement.
On April 16, 2026, we entered into a Share Transfer Agreement with Leyan Yang, a non-U.S. individual, pursuant to which we agreed to acquire 100% of the issued and outstanding shares of Super International Trading Limited,International, a limited liability company incorporated under the laws of Hong Kong,Kong and primarily engaged in the international trading of large-scale industrial equipment, for an aggregate cash consideration of $4,980,000. Super International conducts its business through the sourcing, purchase and sale of large-scale industrial equipment in international markets and the coordination of related procurement, sales and delivery arrangements. On May 27, 2026, the Company completed the acquisition pursuant to the Share Transfer Agreement. As a result of the dateclosing, Super International became a wholly owned subsidiary of thisthe quarterlyCompany, report,and the shareinternational transfertrading hasof notlarge-scale beenindustrial closedequipment yet.became an additional business line operating alongside the Company’s logistics and warehousing business.
On February 3, 2026, our board of directors approved and adopted one or more potential amendments to the Certificate of Incorporation of the Company to effect one or more reverse stock splits of the Company’s issued and outstanding shares of common stock, par value $0.0001 per share, consisting of Class A common stock, par value $0.0001 per shareshare, and Class B common stock, par value $0.0001 per share, at such ratio or ratios as shallmay be determined by the board of directors in its sole discretion, provided that the aggregate ratio of all such reverse stock splits shall not exceed 1-for-500, to be effected at such time or times within 12 months following the approval of the Company’s stockholders.
On February 3, 2026, FAIRVIEWFairview EASTERNEastern INTERNATIONALInternational HOLDINGSHoldings LIMITEDLimited and Huan Liu, collectively holding shares of Class B common stock representing approximately 79.16% of the voting power of the issued and outstanding capital stock of the Company as of that date, approved and adopted the potentialforegoing amendmentscorporate and the reverse stock splitsaction through a written consent in lieu of a special meeting of stockholders. Such corporatestockholder actionsapproval became effective on March 10, 2026, which was 20 calendar days after the Company mailed the definitive information statement on Schedule 14C14C, which was filed with the SEC on February 13, 2026.
Following the approval of our stockholders, on March 23, 2026, our board of directors approved a reverse stock split of the common stock at a ratio of 1-for-200. To implement the reverse stock split, the Company filed itsa Certificate of Amendment to theits Certificate of Incorporation with the Secretary of State of the State of Delaware on March 24, 2026. The Certificate of Amendment to the Certificate of Incorporation became effecteffective at 8:00 a.m., Eastern Time, on April 20, 2026.
The Company is undergoing a business transformation of ourits business model. As a company located in the U.S. and doingconducting business within the PRC, Hong Kong and other markets, the Company’s business, financial condition, and results of operations may be influenced by political, economic, and legal environments in the U.S. andU.S., the PRC, Hong Kong and other markets in which it operates, as well as by the general state of the U.S. and the PRCrelevant economies. The Company’s results may be adversely affected by changes in the political, regulatory, economic, and social conditions in thethese U.S. and the PRC.markets.
The following table provides a summary of our consolidated results of operations for the three and six months ended MarchJune 31,30, 2026 and 2025, highlighting the financial impact of both continuing and discontinued operations:
Comparison of the Three Months Ended MarchJune 31,30, 2026 and 2025
For the three months ended MarchJune 31,30, 2026, we reported revenue of $92,700$nil from logistics and warehousing services segment, including $39,700, or 42.8%, of our total revenue from Edward, which we acquired in February 2024, and $53,000, or 57.2%, of our total revenue from TWEW, which we acquired in December 2024.segment.
Revenue from Edward decreased by 36.5%100.0% to $39,700$nil for the three months ended MarchJune 31,30, 2026, compared to $62,515$52,684 for the same period in 2025. The decrease was primarily due to reducedthe business activities and customer volume at Edward in anticipationdisposal of the planned sale of the entity.Edward.
Revenue from TWEW decreased by 87.3%100.0% to $53,000$nil for the three months ended MarchJune 31,30, 2026, compared to $417,284$301,442 for the same period in 2025, primarily due to tighter U.S. immigration policies, which increased labor costs and constrained labor availability, as well as unfavorable market conditions that reduced customer demand following changes in tariffthe policieslogistics inand 2025.warehousing industries.
For the three months ended MarchJune 31,30, 2026, total cost of revenues decreased to $72,833$nil from $423,543$319,226 for the same period in 2025, representing a decrease of $350,710,$319,226, or 82.8%.100.0%. Cost of revenues attributable to TWEW was $53,000, representing 72.8% of total cost of revenues in the first quarter of 2026,$nil, compared to $381,733$293,429 for the same period in 2025, representing a decrease of $328,733,$293,429, or 86.1%,100.0%, consistent with the corresponding decline in revenue from TWEW.
Cost of revenues from Edward was $19,833, or 27.2% of total cost of revenues$nil for the three months ended MarchJune 31,30, 2026, compared to $41,810$25,797 for the same period in 2025, representing a decrease of $21,977,$25,797, or 52.6%,100.0%, primarily due to the disposal of Edward in 2026, which resulted in the cessation of its operations. The decrease was consistent with the corresponding decline in revenue from Edward.
Cost of revenues iswas mainly labor costs for TWEW and ocean freight service costs for Edward.
General and of revenues was mainly labor costs for TWEW and ocean freight services-logistics and warehousing services segment decreased by $97,409, or 85.7%, to $16,251 for the three months ended June 30, 2026 from $113,660 for the three months ended June 30, 2025. The decrease was mainly due to the disposal of Edward in 2026.
Continuing Operations- International Trading
For the three months ended June 30, 2026, we reported revenue of $868,909 from international trading segment, including $208,909, or 24.0%, of our total revenue from Cheetah and $660,000, or 76.0%, of our total revenue from Super International, which we acquired in May 27 2026.
Revenue from Cheetah increased by 100.0% to $208,909 for the three months ended June 30, 2026, compared to $nil for the same period in 2025. The increase was primarily due to the expansion of our international trading business following the acquisition of Super International.
Revenue from Super International increased by 100.0% to $660,000 for the three months ended June 30, 2026, compared to $nil for the same period in 2025, primarily due to acquisition of Super International. on May 27, 2026, and its operating results were included in our consolidated financial statements beginning on the acquisition date.
For the three months ended June 30, 2026, total cost of revenues increased to $849,409 from $nil for the same period in 2025, representing an increase of $849,409, or 100.0%. Cost of revenues attributable to Cheetah was $199,409, representing 23.48% of total cost of revenues in the second quarter of 2026, compared to $nil for the same period in 2025, representing an increase of $199,409, or 100.0%, consistent with the corresponding increase in revenue from Cheetah.
Cost of revenues from Super International was $650,000, or 76.52% of total cost of revenues for the three months ended June 30, 2026, compared to $nil for the same period in 2025, representing an increase of $650,000, or 100.0%, consistent with the corresponding increase in revenue from Super International.
Cost of revenues was mainly labor costs for Cheetah and ocean freight service costs for Super International.
General and administrative expenses for the Company’s continuing operations - international trading segment increased by $20,084, or 100.0%, to $20,084 for the three months ended June 30, 2026 from $nil for the three months ended June 30, 2025. The increase was mainly due to the commencement of our international trading operations following the acquisition of Super International on May 27, 2026.
Continuing Operations - Corporate Unallocated Operating Adjustments
Operating Expenses
General and Administrative Expenses
General and administrative expenses for the Company’s continuing operationsoperations- decreasedcorporate unallocated operating adjustments segment increased by $230,515,$159,135, or 23.0%, to $770,004$850,780 for the three months ended MarchJune 31,30, 2026 from $1,000,519$691,645 for the three months ended MarchJune 31,30, 2025. The decreaseincrease was mainly due to (i) aan decreaseincrease of $165,038$221,728 inof other administration expenses during the three months ended June 30, 2026, primarily due to consulting fee for disposal of Edward and acquisition of Super International, (ii) an increase of $46,586 of legal and accounting fees asdue weto recordedadditional legal fees incurred in connection with the accountingreverse feestock forsplit, annual(iii) auditan forincrease Fiscalof Year 2024$35,206 in thetravel firstand quarterentertainment expenses as part of 2025,business development efforts and client engagement, partially offset by (iiiv) a decrease of $75,908$90,289 in payroll and benefits expense due to staff optimization and cost-saving measures,measure, (iiiv) a decrease of 28,280$29,976 in rental and leases, primarily due to the termination of one of the Company’s office leases, and (ivvi) a decrease of $15,572$20,189 in insurance expenses resulting from a change in our insurance provider, (v) a decrease of $10,370 in travel and entertainment expenses during the three months ended March 31, 2026, as the Company reduced discretionary spending and maintained tighter controls over non-essential expenses, (vii) a decrease of $4,560 in depreciation and amortization expenses, as we did an impairment loss on intangible assets in 2025, partially offset by (vi) an increase of $1,862 in recruiting expenses, and (ⅷ) an increase of $67,351 of other miscellaneous general and administration expenses during the three months ended March 31, 2026, primarily due to the increase of other profession fee for TWEW.provider.
Share-based compensation expenses were $14,182 and $16,185$10,444 for the three months ended MarchJune 31,30, 2026 and 2025, respectively, representing aan decreaseincrease of $2,003,$3,738, or 12.4%.35.8%.
See also Note 1112 – Stock Based Compensation for more details in our Consolidated Financial Statements includeincluded in this quarterly report.
Interest income from continuing operations was $151,142$264,695 for the three months ended MarchJune 31,30, 2026, compared to $208,090$272,228 for the three months ended MarchJune 31,30, 2025, representing a decrease of 56,948,$7,533 or 27.4%.2.8%. The decrease was primarily due to a reduction in average outstanding loan balances as certain borrowers repaid a portion of their loans, resulting in lower interest income.
Interest expense incurred from our continuing operations was $7,700$6,799 for the three months ended MarchJune 31,30, 2026, which slightly decreased by $1,112,$1,261, or 12.6%,15.6%, from $8,812$8,060 for the three months ended MarchJune 31,30, 2025, mainly due to primarily due to lower interest incurred on premium finance arrangements.
Other income, net from continuing operations was $993,766 for the three months ended June 30, 2026, compared to $17,140 for the three months ended June 30, 2025, representing an increase of $976,626 or 5,697.9%. The increase was primarily driven by higher foreign exchange gains resulting from currency rate fluctuations.
Our income tax provision for continuing operations was 4,400$1,210 for the three months ended MarchJune 31,30, 2026, compared with income tax benefitsprovision of approximately $5,355$12,987 for the same period in 2025.
Net Loss
As a result of the above factors, we had a net lossincome of $616,265$71,045 from our continuing operations for the three months ended MarchJune 31,30, 2026, compared to a net loss of $753,909$512,528 for the same period of 2025.
As disclosed in Note 6 – Discontinued Operations, our Board approved the discontinuation of our parallel-import vehicle business on March 3, 2025. The Company fully exited its parallel-import vehicle business during the year ended December 31, 2024. The Company did not generate any income or incur any expenses from discontinued operations for the three months ended MarchJune 31,30, 2026.
Comparison of the Six Months Ended June 30, 2026 and 2025
Continuing Operations-Logistics and Warehousing Services
For the six months ended June 30, 2026, we reported revenue of $92,700 from logistics and warehousing services segment, including $39,700, or 42.8%, of our total revenue from Edward, which we acquired in February 2024, and $53,000, or 57.2%, of our total revenue from TWEW, which we acquired in December 2024.
Revenue from Edward decreased by 65.5% to $39,700 for the six months ended June 30, 2026, compared to $115,199 for the same period in 2025. The decrease was primarily due to the disposal of Edward.
Revenue from TWEW decreased by 92.6% to $53,000 for the six months ended June 30, 2026, compared to $718,726 for the same period in 2025, primarily due to tighter U.S. immigration policies, which increased labor costs and constrained labor availability, as well as unfavorable market conditions that reduced customer demand in the logistics and warehousing industries.
For the six months ended June 30, 2026, total cost of revenues decreased to $72,833 from $742,769 for the same period in 2025, representing a decrease of $669,936, or 90.2%. Cost of revenues attributable to TWEW was $53,000, representing 72.8% of total cost of revenues for the six months ended June 30, 2026, compared to $675,162 for the same period in 2025, representing a decrease of $622,162, or 92.2%, consistent with the corresponding decline in revenue from TWEW.
Cost of revenues from Edward was $19,833, or 27.2% of total cost of revenues for the six months ended June 30, 2026, compared to $67,607 for the same period in 2025, representing a decrease of $47,774, or 70.7%, consistent with the corresponding disposal of Edward.
Cost of revenues was mainly labor costs for TWEW and ocean freight service costs for Edward.
General and administrative expenses for the Company’s continuing operations-logistics and warehousing services segment decreased by $89,381, or 36.3%, to $156,689 for the six months ended June 30, 2026 from $246,070 for the six months ended June 30, 2025. The decrease was mainly due to lower operating and administrative expenses following the disposal of Edward, as well as ongoing cost control initiatives.
Continuing Operations- International Trading
For the six months ended June 30, 2026, we reported revenue of $868,909 from international trading segment, including $208,909, or 24.0%, of our total revenue from Cheetah, and $660,000, or 76.0%, of our total revenue from Super International, which we acquired on May 27, 2026.
Revenue from Cheetah increased by 100.0% to $208,909 for the six months ended June 30, 2026, compared to $nil for the same period in 2025. The increase was primarily due to the expansion of our international trading business following the acquisition of Super International.
Revenue from Super International increased by 100.0% to $660,000 for the six months ended June 30, 2026, compared to $nil for the same period in 2025, primarily due to acquisition of Super International on May 27, 2026, and its operating results were included in our consolidated financial statements beginning on the acquisition date.
For the six months ended June 30, 2026, total cost of revenues increased to $849,409 from $nil for the same period in 2025, representing an increase of $849,409, or 100.0%. Cost of revenues attributable to Cheetah was $199,409, representing 23.5% of total cost of revenues for the six months ended June 30, 2026, compared to $nil for the same period in 2025, representing an increase of $199,409, or 100.0%, consistent with the corresponding increase in revenue from Cheetah.
Cost of revenues from Super International was $650,000, or 76.5% of total cost of revenues for the six months ended June 30, 2026, compared to $nil for the same period in 2025, representing an increase of $650,000, or 100.0%, consistent with the corresponding increase in revenue from Super International.
Cost of revenues was mainly labor costs for Cheetah and ocean freight service costs for Super International.
General and administrative expenses for the Company’s continuing operations-international trading segment increased by $20,084, or 100.0%, to $20,084 for the six months ended June 30, 2026 from $nil for the six months ended June 30, 2025. The increase was mainly due to the acquisition of Super International.
CTNT insider buying and selling (Form 4)
Since 2026-04-11, insiders reported open-market purchases in 1 Form 4 filing (1 insider, 1 trade date, 200,000 shares, about $400.0K) and open-market sales in 0 filings. Net open-market shares: 200,000 (purchases minus sales); net value about $400.0K.Totals add up every open-market (code P and S) line in those filings, using the prices reported in the filings. Awards, option exercises, tax withholding and gifts are listed below but not counted.
| Trade date | Insider | Transaction | Shares | Price | Value |
|---|---|---|---|---|---|
| 2026-06-15 | Liu Huan |
Open-market purchase | 200,000 | $2.00 | $400.0K |
Well-known investors holding CTNT (13F)
None of the 59 investors we track reported a position in their latest 13F.