Financial Position - As of June 30, 2023, the company reported approximately $29.1 million in cash and cash equivalents, an increase from $21.3 million as of December 31, 2022, representing a growth of 36.8%[49] - The allowance for doubtful accounts was approximately $2.8 million as of June 30, 2023, down from $3.1 million as of December 31, 2022, indicating a decrease of 9.7%[55] - As of June 30, 2023, approximately $31.7 million was deposited with financial institutions in the PRC, with $29.1 million not covered by deposit insurance[89] - As of June 30, 2023, accounts receivable net totaled $75,774, a decrease of 15.0% from $89,110 as of December 31, 2022[106] - The total tax payable as of June 30, 2023, was $3.20 million, an increase from $2.21 million as of December 31, 2022, reflecting a rise of approximately 45%[180] Revenue and Operations - For the six months ended June 30, 2023, total revenues increased to approximately $184.97 million, up 11.1% from $166.54 million in the same period of 2022[71] - Transportation services generated $173.99 million in revenue, representing a 12.5% increase from $154.61 million in the prior year[71] - The company's operations are primarily based in the PRC, with revenues from this region amounting to $115.25 million for the six months ended June 30, 2023, up from $95.17 million in 2022[73] - The company generates revenue from transportation services and warehouse storage management services, with revenue recognized upon delivery and on a straight-line basis, respectively[63][64] Assets and Liabilities - As of June 30, 2023, contract liabilities amounted to approximately $1.2 million, compared to $1.1 million as of December 31, 2022[70] - The company did not recognize any impairment loss on long-lived assets for the six months ended June 30, 2023, and 2022, suggesting stable asset performance[58] - Intangible assets, net increased to $12,237 as of June 30, 2023, from $6,711 as of December 31, 2022, primarily due to the acquisition of land use rights valued at approximately $5.9 million[109] - The total operating lease liabilities decreased from $27.14 million as of December 31, 2022, to $20.78 million as of June 30, 2023, reflecting a reduction of about 23%[163] Debt and Financing - The total short-term bank borrowings balance was approximately $34.9 million, down from $47.7 million as of December 31, 2022, representing a decrease of 26.5%[123] - The Company entered into a short-term loan facility agreement with Bank of China Fuzhou Jin'an Branch for a total facility of approximately $12.3 million at a fixed interest rate of 4.35% per annum[128] - The Company drew down approximately $11.1 million under a new short-term loan facility agreement with Bank of China Fuzhou Jin'an Branch at a fixed interest rate of 2.5% per annum[131] - The Company has financial covenants requiring a current ratio of no less than 0.85 and financing exposure balance not exceeding approximately $55.4 million[131] Taxation - The Company's effective income tax rate for the six months ended June 30, 2023, was 17.9%, compared to 13.1% for the same period in 2022[172] - The Company reported a total of $7.87 million in income before income taxes for the six months ended June 30, 2023, significantly up from $2.83 million in the same period of 2022[170] Legal and Compliance - Approximately $1.0 million (RMB 7.1 million) was frozen in bank due to pending lawsuits, included in restricted cash as of June 30, 2023[192] - The Company does not anticipate that the outcomes of legal proceedings will have a material adverse effect on its consolidated financial position or results of operations[192] Shareholder Information - The Company completed its IPO on April 4, 2023, raising gross proceeds of $9.6 million from the sale of 2.4 million Class A Ordinary Shares at $4.00 per share[183] - As of June 30, 2023, the Company had 40.52 million Class A Ordinary Shares and 41.88 million Class B Ordinary Shares issued and outstanding[184] Subsequent Events - No subsequent events have occurred that would require recognition or disclosure in the unaudited condensed consolidated financial statements as of the issuance date[193]

Corporate Structure and Ownership - As of December 31, 2022, the company had a total of 41,880,000 Class B Ordinary Shares held by Shengfeng International Limited, reflecting a significant ownership concentration[20] - The company undertook a reorganization in 2020, resulting in a share capital amendment from $50,000 divided into 50,000 ordinary shares to $50,000 divided into 400,000,000 Class A Ordinary Shares and 100,000,000 Class B Ordinary Shares[14] - The company’s share capital structure includes Class A Ordinary Shares with one vote per share and Class B Ordinary Shares with ten votes per share, indicating a dual-class voting structure[20] - The ownership structure of the VIE includes Fujian Yunlian Shengfeng Industry Co., Ltd. (54.58%) and Yongxu Liu (30.99%), with Mr. Liu indirectly owning 80.12% of Shengfeng Logistics[99] Initial Public Offering - The company completed its initial public offering (IPO) on April 4, 2023, raising approximately $8.5 million from the sale of 2,400,000 Class A Ordinary Shares at a public offering price of $4.00 per share[15] Subsidiaries and Operations - The company has established a total of 30 majority-owned or wholly-owned subsidiaries under PRC laws, enhancing its operational capacity[12] - The company has a significant presence in the logistics sector, with subsidiaries providing transportation and warehouse storage management services across various provinces in China[24] - The company’s principal activities are primarily focused on transportation and warehouse storage management services, which are critical for its operational strategy[24] Variable Interest Entity (VIE) Structure - The company’s corporate structure includes a variable interest entity (VIE) arrangement with Shengfeng Logistics, allowing it to consolidate financial results under U.S. GAAP[16] - The VIE Agreements allow Shengfeng Logistics to consolidate financial results under U.S. GAAP, despite not having direct ownership[31] - The VIE Agreements have not been tested in a court of law in China as of the date of this annual report, posing risks to operational control[49] - The VIE Agreements may not provide the same level of operational control as direct ownership, leading to potential conflicts of interest and operational risks[51] - The company relies on the performance of Shengfeng Logistics and its shareholders under the VIE Agreements to maintain control over its operations[99] - If the VIE Agreements are invalidated, the company's business operations in China could be materially and adversely affected[90] Financial Performance - The company generated total revenues of $370.325 million for the fiscal year ended December 31, 2022[73] - The cost of revenues was $328.793 million, resulting in a gross profit of $41.532 million[73] - Net income for the fiscal year was reported at $7.826 million[73] - Current assets amounted to $135.697 million as of December 31, 2022[72] - Total liabilities were $150.173 million as of December 31, 2022[72] Regulatory Environment and Compliance - The company is subject to risks associated with the PRC government's regulatory actions, which could materially affect operations and the value of Class A Ordinary Shares[52] - The Chinese government has strengthened anti-monopoly supervision since 2021, but as of the report date, these actions have not impacted the company's ability to conduct business[52] - The Trial Administrative Measures of Overseas Securities Offering and Listing by Domestic Companies came into effect on March 31, 2023, introducing new regulatory requirements[53] - The company may face significant risks if it fails to obtain necessary permissions from Chinese authorities for issuing securities to foreign investors[53] - The company is not currently required to obtain permission from PRC authorities to operate or issue Class A Ordinary Shares to foreign investors[56] - The company may face risks related to compliance with evolving PRC laws and regulations, which could adversely affect its operations and ability to offer securities[59] Labor and Employment - The company is currently not in full compliance with PRC labor-related laws, particularly regarding social insurance and housing fund contributions[155] - Labor costs in China have been increasing, which may adversely affect the company's profitability if these costs cannot be passed on to clients[153] - The number of dispatched workers has exceeded the 10% limitation required by PRC regulations, which may subject the company to penalties[160] Taxation and Financial Regulations - Under the PRC Enterprise Income Tax Law, the company may be classified as a PRC "resident enterprise," resulting in unfavorable tax consequences[177] - Dividends payable to non-PRC investors may be subject to a withholding tax of 10% for non-PRC enterprises or 20% for non-PRC individuals, potentially reducing investment returns[179] - The PRC tax authorities may adjust preferential tax treatment if they determine that a company benefits from reduced tax rates due to tax-driven structures[192] Future Outlook and Strategic Initiatives - The company plans to expand its market presence and invest in new technologies to enhance operational efficiency[76] - Future guidance indicates a focus on increasing revenues and improving profit margins through strategic initiatives and potential acquisitions[76]