Cheetah Net Supply Chain Service (CTNT) - 2024 Q2 - Quarterly Report

Financial Performance - Total revenues for the three months ended June 30, 2024, were $293,860, a significant decrease from $12,223,026 in the same period of 2023[7] - Gross profit for the six months ended June 30, 2024, was $57,479, down from $2,395,426 in the same period of 2023[7] - The net loss for the three months ended June 30, 2024, was $(612,880), compared to a net income of $155,745 for the same period in 2023[7] - The net loss for the six months ended June 30, 2024, was $1,221,810, compared to a net income of $47,812 for the same period in 2023[13] - Total revenue for the three months ended June 30, 2024, was $293,860, a decrease of 97.6% compared to $12,223,026 for the same period in 2023[9] - Total revenue for the six months ended June 30, 2024, was $1,801,645, a decrease of 92.0% compared to $22,437,468 for the same period in 2023[9] - The company reported a loss from operations of $(852,348) for the three months ended June 30, 2024, compared to a profit of $545,629 in the same period of 2023[7] - Operating expenses for the six months ended June 30, 2024, totaled $1,731,258, compared to $1,565,593 for the same period in 2023[7] Assets and Liabilities - Total current assets increased to $13,621,717 as of June 30, 2024, from $9,820,537 as of December 31, 2023[5] - Total assets rose to $16,275,899 as of June 30, 2024, compared to $10,059,265 as of December 31, 2023[5] - Current liabilities decreased to $1,240,967 as of June 30, 2024, from $2,358,791 as of December 31, 2023[5] - Total liabilities decreased to $2,462,086 as of June 30, 2024, from $3,154,637 as of December 31, 2023[5] - Stockholders' equity increased to $13,813,813 as of June 30, 2024, from $6,904,628 as of December 31, 2023[5] Cash Flow - Cash provided by operating activities for the six months ended June 30, 2024, was $827,980, significantly lower than $4,145,363 for the same period in 2023[13] - Net cash provided by operating activities was $827,980, a significant decrease from $4,145,363 in the prior year[13] - Net cash used in investing activities was approximately $0.9 million for the six months ended June 30, 2024, including $0.2 million for the Edward acquisition[165] - Net cash provided by financing activities was $5,944,540 for the six months ended June 30, 2024, compared to $(3,611,618) for the same period in 2023[168] Revenue Segments - Revenue from the parallel-import vehicle dealership is recognized at the point of vehicle delivery, with no right of return or sales incentives provided to dealers[41] - In the logistics and warehousing services segment, revenue is recognized based on the actual number of days goods are stored, with no provisions for sales return allowances[42] - For the six months ended June 30, 2024, the company generated approximately $0.2 million in revenues from logistics and warehousing services, representing about 31.8% of total revenues for the period[118] - Revenue from parallel-import vehicles decreased by $20.8 million, or 92.7%, from approximately $22.4 million for the six months ended June 30, 2023, to $1.6 million for the same period in 2024[141] Acquisitions and Investments - The company reported an acquisition of business for $220,117 during the six months ended June 30, 2024[13] - The company finalized the acquisition of Edward for a total purchase price of $1.5 million, consisting of $0.3 million in cash and $1.2 million in stock[71] - The company acquired Edward Transit Express Group Inc. for a total consideration of $1,500,000 in cash and stock, expanding its logistics capabilities[16] Operational Changes - The company dissolved two wholly owned subsidiaries on May 23, 2024, as part of its restructuring efforts[17] - The company has engaged in parallel-import vehicle dealership and logistics services, with subsidiaries involved in freight forwarding and warehousing[14][19] Tax and Compliance - The Company incurred a total income tax benefit of $(247,275) for the three months ended June 30, 2024, compared to a benefit of $56,997 for the same period in 2023[87] - The effective tax rate for the three months ended June 30, 2024, was 28.5%, compared to 26.8% for the same period in 2023[88] - The Company has not assessed a valuation allowance for deferred tax assets, believing it is more likely than not that all will be realized before expiration[48] Stock and Shares - As of June 30, 2024, there were 24,148,329 shares of Class A common stock and 8,250,000 shares of Class B common stock issued and outstanding[102] - The Company closed its IPO on August 3, 2023, selling 1,250,000 shares of Class A common stock at a price of $4.00 per share, resulting in gross proceeds of $5.0 million[99] - The Company completed a follow-on offering on July 25, 2024, for 6,479,663 shares of Class A common stock at a price of $0.23 per share, with net proceeds intended for working capital and general corporate purposes[110] Economic Environment - The Company experienced a significant decline in the market for new luxury vehicles in the PRC, attributed to weak economic conditions and a shift in consumer demand towards domestically produced electric vehicles[117] - The ongoing economic weakness in the PRC and a shift towards domestically produced EVs have negatively impacted vehicle sales volumes and revenues[128]