Cheetah Net Supply Chain Service (CTNT) - 2025 Q2 - Quarterly Report

PART I – FINANCIAL INFORMATION This part presents the company's unaudited condensed consolidated financial statements and management's discussion and analysis Item 1. Financial Statements This section presents the unaudited condensed consolidated financial statements for Cheetah Net Supply Chain Service Inc., including balance sheets, statements of operations, changes in stockholders' equity, and cash flows, along with detailed notes Condensed Consolidated Balance Sheets The balance sheet shows a decrease in total assets and stockholders' equity from December 31, 2024, to June 30, 2025, primarily driven by a significant reduction in cash and cash equivalents, partially offset by an increase in loan receivables Key Balance Sheet Data (June 30, 2025 vs. December 31, 2024) | Metric | June 30, 2025 (Unaudited) | December 31, 2024* | | :-------------------------------- | :------------------------ | :----------------------- | | Cash and cash equivalents | $185,186 | $1,650,962 | | Loan receivable | $8,749,445 | $6,088,295 | | Total Current Assets | $9,916,789 | $11,037,072 | | Total Assets | $13,895,388 | $15,379,454 | | Total Current Liabilities | $976,800 | $883,261 | | Total Liabilities | $2,517,524 | $2,761,782 | | Total Stockholders' Equity | $11,377,864 | $12,617,672 | - Cash and cash equivalents decreased significantly from $1,650,962 at December 31, 2024, to $185,186 at June 30, 2025[8] - Loan receivable increased from $6,088,295 at December 31, 2024, to $8,749,445 at June 30, 2025[8] Condensed Consolidated Statements of Operations The company reported increased revenue and gross profit for the six months ended June 30, 2025, compared to the prior year, primarily from continuing operations, but net loss increased due to higher operating expenses and a shift from income tax benefits to expenses Key Operating Results (Continuing Operations) | Metric (Continuing Operations) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :----------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Revenue | $354,126 | $93,563 | $833,925 | $170,397 | | Cost of Revenue | $319,226 | $45,598 | $742,769 | $88,098 | | Gross Profit | $34,900 | $47,965 | $91,156 | $82,299 | | Loss from Operations | $(780,849) | $(817,389) | $(1,741,297) | $(1,550,697) | | Other Income, Net | $281,308 | $20,092 | $493,202 | $41,338 | | Loss from Continuing Operations Before Income Taxes | $(499,541) | $(797,297) | $(1,248,095) | $(1,509,359) | | Income tax (benefits) | $12,987 | $(247,275) | $18,342 | $(492,989) | | Loss from Continuing Operations | $(512,528) | $(550,022) | $(1,266,437) | $(1,016,370) | | Net Loss | $(512,528) | $(612,880) | $(1,266,437) | $(1,221,810) | - Revenue from continuing operations for the six months ended June 30, 2025, increased by 389.4% to $833,925 from $170,397 in the prior year[10] - Net loss for the six months ended June 30, 2025, was $(1,266,437), an increase from $(1,221,810) in the same period of 2024[10] Condensed Consolidated Statements of Changes in Stockholders' Equity Stockholders' equity decreased from $12,617,672 at December 31, 2024, to $11,377,864 at June 30, 2025, primarily due to the net loss from continuing operations, partially offset by share-based compensation expenses Stockholders' Equity Changes (December 31, 2024 to June 30, 2025) | Item | December 31, 2024 | March 31, 2025 | June 30, 2025 | | :------------------------ | :---------------- | :------------- | :------------ | | Total Stockholders' Equity | $12,617,672 | $11,879,948 | $11,377,864 | | Share-based compensation | — | $16,185 | $10,444 | | Net loss from continuing operations | $(4,680,611) | $(753,909) | $(512,528) | - Accumulated deficit increased from $(4,680,611) at December 31, 2024, to $(5,947,048) at June 30, 2025, reflecting the net losses[12] Condensed Consolidated Statements of Cash Flows Net cash provided by operating activities increased significantly for the six months ended June 30, 2025, driven by cash from discontinued operations, but investing activities used substantial cash due to loans made to third parties, and financing activities shifted from providing cash to using cash Cash Flow Summary (Six Months Ended June 30) | Cash Flow Activity | 2025 (Unaudited) | 2024 (Unaudited) | | :---------------------------------- | :--------------- | :--------------- | | Net cash provided by operating activities | $1,333,668 | $827,980 | | Cash used in operating activities-continuing operations | $(1,206,833) | $(2,137,280) | | Cash provided by operating activities-discontinued operations | $2,540,501 | $2,965,260 | | Net cash used in investing activities | $(2,661,150) | $(912,617) | | Net cash (used in) provided by financing activities | $(138,294) | $5,944,540 | | Net (decrease) increase in cash | $(1,465,776) | $5,859,903 | | Cash, end of year | $185,186 | $6,292,901 | - Cash used in investing activities more than doubled in 2025, primarily due to $3,445,150 in loans made to third parties[15] - Financing activities shifted from providing $5,944,540 in 2024 (due to public offerings) to using $138,294 in 2025[15] Notes to Unaudited Condensed Consolidated Financial Statements These notes provide detailed explanations of the company's organization, significant accounting policies, financial instrument details, and the impact of its business transformation, including the discontinuation of parallel-import vehicle sales and the expansion into logistics and warehousing services NOTE 1 — ORGANIZATION AND BUSINESS DESCRIPTION Cheetah Net Supply Chain Service Inc. converted from an LLC to a corporation in 2022 and holds 100% equity in several subsidiaries, discontinuing its parallel-import vehicle dealership business in March 2025 to shift focus to logistics and warehousing services through acquisitions, a reverse stock split, and subsidiary dissolutions - The Company discontinued its parallel-import vehicle dealership business in March 2025 due to declining sales (95.7% drop in 2024 revenue) and uncollectible receivables[19][20][21] - Business focus shifted to logistics and warehousing services through acquisitions: Edward Transit Express Group Inc. (Jan 2024) for logistics and warehousing, and TW & EW Services Inc. (Dec 2024) for labor and logistics services[16][22][23] - A 1-for-16 reverse stock split was effectuated on October 21, 2024, with Class A common stock trading on a post-split basis from October 24, 2024[18] - Cheetah Net Logistics LLC and Pacific Consulting LLC were dissolved on June 24, 2025, as part of internal corporate restructuring[16][172] NOTE 2 — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES The financial statements are prepared under U.S. GAAP, with a going concern assumption despite operating losses, supported by management's new business strategy, and key accounting policies include estimates, cash and cash equivalents, accounts receivable under CECL model, loan receivables, depreciation, amortization, fair value measurements, lease accounting, revenue recognition, and income tax accounting with a full valuation allowance against deferred tax assets - The Company's ability to continue as a going concern is dependent on successfully executing its new business strategy and achieving profitable operations, despite a net operating loss of approximately $1.3 million for the six months ended June 30, 2025[26][29] - Revenue from continuing operations for the six months ended June 30, 2025, was $833,925, a significant increase from $170,397 in 2024, primarily driven by the acquisition of TWEW[59] Cash and Cash Equivalents | Item | June 30, 2025 (Unaudited) | December 31, 2024 | | :-------------------- | :------------------------ | :---------------- | | Cash held in Current Accounts | $185,186 | $627,924 | | Certificate of Deposit| — | $1,023,038 | | Total | $185,186 | $1,650,962 | - A full valuation allowance was recorded against deferred tax assets as of June 30, 2025, and December 31, 2024, due to cumulative pretax book losses and forecasted losses for 2025[65][134] NOTE 3 — LOAN RECEIVABLE Loan receivables significantly increased to $8,749,445 as of June 30, 2025, from $6,088,295 at December 31, 2024, due to several new unsecured short-term loan agreements with Hongkong Sanyou Petroleum Co Limited and Asia Finance Investment Limited, bearing annual interest rates ranging from 8.0% to 12.0%, which led to a substantial increase in interest income Short-term Loan Receivables | Date | Borrower | Principal Amount | Interest Rate | Maturity | | :----------- | :----------------------------- | :--------------- | :------------ | :------- | | June 20, 2024| Hongkong Sanyou Petroleum Co Ltd | $1,000,000 | 12.0% | 12 months| | July 23, 2024| Hongkong Sanyou Petroleum Co Ltd | $1,500,000 | 12.0% | 12 months| | Aug 16, 2024 | Asia Finance Investment Limited| $558,295 (adjusted)| 1.0% monthly | 12 months| | Oct 2, 2024 | Hongkong Sanyou Petroleum Co Ltd | $1,000,000 | 12.0% | 12 months| | Oct 28, 2024 | Hongkong Sanyou Petroleum Co Ltd | $1,000,000 | 12.0% | 12 months| | Nov 20, 2024 | Hongkong Sanyou Petroleum Co Ltd | $500,000 | 12.0% | 12 months| | Jan 7, 2025 | Asia Finance Investment Limited| $100,000 | 1.0% monthly | 12 months| | Jan 29, 2025 | Asia Finance Investment Limited| $300,000 | 1.0% monthly | 12 months| | Mar 17, 2025 | Hongkong Sanyou Petroleum Co Ltd | $950,000 | 12.0% | 12 months| | Mar 18, 2025 | Asia Finance Investment Limited| $825,400 | 1.0% monthly | 12 months| | Mar 19, 2025 | Asia Finance Investment Limited| $900,000 | 1.0% monthly | 12 months| | June 13, 2025| Asia Finance Investment Limited| $169,750 | 8.0% | 12 months| | June 26, 2025| Asia Finance Investment Limited| $200,000 | 8.0% | 12 months| Interest Income from Loan Receivables | Period | Interest Income | | :-------------------------- | :-------------- | | Three Months Ended June 30, 2025 | $272,228 | | Six Months Ended June 30, 2025 | $474,896 | | Three Months Ended June 30, 2024 | $21,250 | | Six Months Ended June 30, 2024 | $44,876 | NOTE 4 — OTHER RECEIVABLES Other receivables increased significantly to $843,579 as of June 30, 2025, from $370,696 at December 31, 2024, primarily due to a substantial rise in interest receivable from loan agreements Other Receivables Breakdown | Item | June 30, 2025 (Unaudited) | December 31, 2024 | | :---------------- | :------------------------ | :---------------- | | Rent Deposit | $114,992 | $112,751 | | Interest Receivable | $715,405 | $245,655 | | Others | $13,182 | $12,290 | | Total | $843,579 | $370,696 | - Interest receivable increased by $469,750, from $245,655 at December 31, 2024, to $715,405 at June 30, 2025, primarily from accrued interests on loan agreements[86] NOTE 5 — DISCONTINUED OPERATIONS The company formally discontinued its parallel-import vehicle business on March 3, 2025, reclassifying all associated financial results as discontinued operations, which for the six months ended June 30, 2024, reported a net loss of $205,440 on revenues of $1,631,248, with significant collection efforts made on accounts receivable and credit losses recognized - The Board approved the discontinuation of the parallel-import vehicle business on March 3, 2025, leading to reclassification of all related financial results as discontinued operations[88][193][215] Loss from Discontinued Operations (Six Months Ended June 30, 2024) | Metric | 2024 (Unaudited) | | :---------------------- | :--------------- | | Revenue | $1,631,248 | | Cost of Revenue | $1,656,068 | | Gross loss | $(24,820) | | Total operating expenses| $98,262 | | Interest expenses | $82,358 | | Loss from discontinued operations | $(205,440) | - Accounts receivable from discontinued operations were $2,540,501 as of December 31, 2024, after an allowance for credit loss of $1,589,546. An additional $2.5 million was collected by March 3, 2025, resulting in a zero balance[93][94][95][96] - Cash provided by discontinued operating activities was $2,540,501 for the six months ended June 30, 2025, primarily from accounts receivable collection[99][226] NOTE 6 — PROPERTY, PLANT, AND EQUIPMENT, NET Property, plant, and equipment, net, decreased slightly to $378,631 as of June 30, 2025, from $398,395 at December 31, 2024, with depreciation expense for the six months ended June 30, 2025, at $19,764 and no impairment losses recorded Property, Plant, and Equipment, Net | Item | June 30, 2025 (Unaudited) | December 31, 2024 | | :------------------------ | :------------------------ | :---------------- | | Motor Vehicles | $365,000 | $365,000 | | Leasehold improvements | $60,795 | $60,795 | | Less accumulated depreciation | $(47,164) | $(27,400) | | Total | $378,631 | $398,395 | - Depreciation expense for the six months ended June 30, 2025, was $19,764, compared to $7,636 for the same period in 2024[100] NOTE 7 — LEASES The company leases office and warehouse spaces, recognizing operating lease ROU assets and liabilities, with total lease expenses for the six months ended June 30, 2025, significantly increasing to $416,258 due to a new office lease in Irvine, California, and an extended warehouse lease for its subsidiary Edward, while also attempting to terminate an existing lease - A new non-cancellable operating lease for office space in Irvine, California, commenced on July 23, 2024, with monthly base rent ranging from $42,000 to $45,000[106] Total Lease Expenses (Six Months Ended June 30) | Lease Type | 2025 (Unaudited) | 2024 (Unaudited) | | :---------------------- | :--------------- | :--------------- | | Operating lease expenses| $355,526 | $119,703 | | Short-term lease expenses | $60,732 | $47,849 | | Total lease expenses | $416,258 | $167,552 | Operating Lease Liabilities | Item | June 30, 2025 (Unaudited) | December 31, 2024 | | :------------------------------ | :------------------------ | :---------------- | | Right-of-use assets | $1,548,646 | $1,836,521 | | Operating lease liabilities – current | $612,719 | $438,351 | | Operating lease liabilities – non-current | $950,372 | $1,268,501 | | Total operating lease liabilities | $1,563,091 | $1,706,852 | NOTE 8 — INTANGIBLE ASSET AND GOODWILL The company acquired Edward in January 2024 for $1.5 million and TWEW in November 2024 for $1 million, recognizing goodwill and intangible assets such as developed technology, customer relationships, and trade names, with amortization expenses for intangible assets totaling $56,144 for the six months ended June 30, 2025, and no impairment losses - Acquisition of Edward (Jan 2024): Gross purchase price $1.5 million, consisting of $0.3 million cash and $0.9 million fair value of Class A common stock. Recognized goodwill of $568,532 and intangible assets (developed technology, customer relationships, trade names)[114][115][116][117] - Acquisition of TWEW (Nov 2024): Gross purchase price $1 million, consisting of $0.2 million cash and $0.8 million fair value of Class A common stock. Recognized goodwill of $475,861 and customer relationships of $600,000[118][119] Intangible Assets and Estimated Useful Lives | Intangible Assets | Estimated Useful Lives (months) | | :------------------------ | :------------------------------ | | Edward-Developed Technology | 84 | | Edward-Customer Relationships | 144 | | Edward-Trade Names | 84 | | TWEW-Customer Relationships | 120 | - Accumulated amortization expenses for intangible assets were $56,144 for the six months ended June 30, 2025, and $21,786 for the same period in 2024[119] NOTE 9 — PREMIUM FINANCE The company entered a premium finance agreement on August 1, 2024, to finance directors and officers' insurance, borrowing $205,774.80 at an 8.51% annual interest rate, which was fully repaid by June 2, 2025, with related interest expenses of $3,004 for the six months ended June 30, 2025 - A premium finance loan of $205,774.80 at 8.51% annual interest, taken on August 1, 2024, for D&O insurance, was fully repaid by June 2, 2025[121] Premium Finance Balance | Item | June 30, 2025 (Unaudited) | December 31, 2024 | | :------------- | :------------------------ | :---------------- | | Premium finance | $— | $120,461 | - Interest expenses from premium finance were $3,004 for the six months ended June 30, 2025, compared to $996 for the same period in 2024[122] NOTE 10 — LONG-TERM BORROWINGS Total long-term borrowings decreased slightly to $626,764 as of June 30, 2025, from $644,597 at December 31, 2024, including loans from the U.S. Small Business Administration (SBA) and Thread Capital Inc., with scheduled monthly installment payments extending to 2050 and 2031, respectively, and interest expenses of $13,406 for the six months ended June 30, 2025 Long-Term Borrowings | Lender | June 30, 2025 (Unaudited) | December 31, 2024 | | :---------------------- | :------------------------ | :---------------- | | Small Business Administration | $462,329 | $468,542 | | Thread Capital Inc. | $164,435 | $176,055 | | Total | $626,764 | $644,597 | | Current portion | $36,412 | $34,577 | | Non-current portion | $590,352 | $610,020 | - SBA loan: $500,000 total, fixed interest rate of 3.75% per annum, monthly payments of $2,485, maturing May 2050[123] - Thread Capital loan: $221,300 total, fixed annual interest rate of 5.5% (after Dec 1, 2022), monthly payments of $2,721, maturing May 2031[124] - Interest expenses for long-term borrowings were $13,406 for the six months ended June 30, 2025, compared to $15,563 for the same period in 2024[125] NOTE 11 — STOCK BASED COMPENSATION The company adopted the Amended and Restated 2024 Stock Incentive Plan, granting both vested and non-vested shares to directors and employees, resulting in share-based compensation expenses of $26,629 for the six months ended June 30, 2025, with total unrecognized compensation cost for non-vested shares of $183,337 to be recognized over a weighted average period of three years - The Company adopted the Amended and Restated 2024 Stock Incentive Plan on August 16, 2024, approved by stockholders on September 30, 2024[126] - Share-based compensation expenses were $26,629 for the six months ended June 30, 2025, compared to nil in 2024[129][207] Non-Vested Shares Activity (Six Months Ended June 30, 2025) | Item | Number of non-vested Shares | Weighted Average Grant Date Fair Value Per Share (US$) | | :--------------------------------- | :-------------------------- | :----------------------------------------------------- | | Outstanding as of December 31, 2024 | 79,062 | 3.28 | | Correction | (6,250) | 3.39 | | Forfeited | (6,250) | 1.94 | | Outstanding as of June 30, 2025 | 66,562 | 3.39 | - Total unrecognized compensation cost relating to non-vested shares was $183,337 as of June 30, 2025, to be recognized over a weighted average period of three years[130] NOTE 12 — INCOME TAXES The company recorded an income tax expense of $18,342 for the six months ended June 30, 2025, a significant change from a $492,989 income tax benefit in the prior year, including current quarter provision and prior period/acquisition-related tax payments, while maintaining a full valuation allowance against deferred tax assets due to cumulative and forecasted losses Income Tax Provision (Six Months Ended June 30) | Component | 2025 (Unaudited) | 2024 (Unaudited) | | :------------------------ | :--------------- | :--------------- | | Total current income tax provision | $5,200 | $4,328 | | Total deferred income tax expenses (benefits) | — | $(497,317) | | Total income tax benefits | $5,200 | $(492,989) | - The consolidated statement of operations reflects an income tax expense of approximately $18,342 for the six months ended June 30, 2025, including current provision and prior period/acquisition-related tax filings[132][213] - A full valuation allowance is recorded against deferred tax assets due to a three-year cumulative pretax book loss and a forecasted loss for 2025[134] Effective Tax Rate (Six Months Ended June 30) | Item | 2025 (Unaudited) | 2024 (Unaudited) | | :------------------------ | :--------------- | :--------------- | | Federal income tax at the statutory rate | 21.0 % | 21.0 % | | State statutory tax rate | 4.3 % | 11.4 % | | Change in valuation allowance | (25.3)% | — % | | Effective tax rate | (0.4)% | 32.7 % | NOTE 13 — CONCENTRATIONS The company's business is influenced by political, economic, and legal environments in the U.S. and PRC, particularly due to its logistics services catering to cross-border trade, with risks including trade policy changes, tariffs, and dependence on limited customers and third-party providers in the early stage of its logistics and warehousing business - The company's business is influenced by political, economic, and legal environments in the U.S. and PRC, especially due to its logistics services for cross-border trade[138] - Risks include potential negative impacts from government policies on ocean freight and tariffs, high dependence on limited customers and third-party providers, and competition in the logistics and warehousing industry[35][175] NOTE 14 — STOCKHOLDERS' EQUITY The company's authorized common stock is 1,000,000,000 shares ($0.0001 par value), comprising Class A (one vote) and Class B (15 votes) common stock, with key equity activities including subscription payments, IPO proceeds, follow-on offerings, a 1-for-16 reverse stock split, and termination of warrants - Authorized common stock: 1,000,000,000 shares ($0.0001 par value), with 891,750,000 Class A (one vote) and 108,250,000 Class B (15 votes)[142] - IPO (August 2023): 78,125 Class A shares at $64.00/share, gross proceeds $5.0 million[145] - May Offering (May 2024): 825,625 Class A shares at $9.92/share, gross proceeds $8.19 million[147] - July Offering (July 2024): 404,979 Class A shares at $3.68/share, gross proceeds $1.49 million[148][244] - A 1-for-16 reverse stock split took effect on October 21, 2024[149] - 3,906 equity-classified underwriter warrants were terminated on March 4, 2024, with a termination fee of $78,125[154] NOTE 15 — SEGMENT REPORTING Following the discontinuation of the parallel-import vehicle business, the company now operates as a single reportable segment focused on logistics and warehousing services, with substantially all long-lived assets located in the U.S., and the segment reported a net loss of $(1,266,437) for the six months ended June 30, 2025 - The company now operates in one operating segment: logistics and warehousing services, following the discontinuation of the parallel-import vehicle business[73][155] Logistics and Warehousing Services Segment Performance (Six Months Ended June 30) | Metric | 2025 (Unaudited) | 2024 (Unaudited) | | :------------------------ | :--------------- | :--------------- | | Revenues | $833,925 | $170,397 | | Cost of revenues | $742,769 | $88,098 | | Staff cost | $616,274 | $532,290 | | Share-based compensation expenses | $26,629 | — | | Lease expense | $416,258 | $167,552 | | Depreciation and amortization expenses | $75,907 | $29,422 | | Interest expenses | $16,872 | $16,607 | | Income tax expenses (credit) | $18,342 | $(492,989) | | Segment net loss | $(1,266,437) | $(1,016,370) | Discontinued Operations (Parallel-Import Vehicle Segment) Performance (Six Months Ended June 30, 2024) | Metric | 2024 (Unaudited) | | :------------------------ | :--------------- | | Revenues | $1,631,248 | | Cost of revenues | $1,656,068 | | Gross loss | $(24,820) | | Staff cost | $77,652 | | Interest expenses | $82,358 | | Segment net loss | $(205,440) | Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations This section provides management's perspective on the company's financial performance, condition, and operational changes, highlighting the strategic shift from parallel-import vehicle sales to logistics and warehousing services, the impact of acquisitions, financial results for both continuing and discontinued operations, liquidity, capital resources, and critical accounting policies Business Overview and Recent Developing Trends Cheetah Net has transitioned from parallel-import vehicle sales, discontinued in March 2025 due to market decline, to logistics and warehousing services, supported by acquisitions of Edward (Feb 2024) and TWEW (Dec 2024), relocation of its headquarters to Irvine, California, a 1-for-16 reverse stock split in October 2024, and dissolution of two subsidiaries in June 2025, facing risks related to U.S.-PRC political and economic environments and market competition - The company discontinued its parallel-import vehicle business on March 3, 2025, due to a significant decline in sales (95.7% drop in 2024) and collection difficulties[165][166] - Business focus shifted to logistics and warehousing services, supported by the acquisition of Edward (Feb 2024) and TWEW (Dec 2024), and relocation of headquarters to Irvine, California[167] - A 1-for-16 reverse stock split was effectuated on October 21, 2024[171] - Cheetah Net Logistics LLC and Pacific Consulting LLC were dissolved on June 24, 2025[172] - Risks include dependence on U.S.-PRC political/economic environments, trade policies, limited customers, and intense industry competition[173][175] Results of Operations For the six months ended June 30, 2025, revenue from continuing operations (logistics and warehousing) increased by 389.4% to $833,925, primarily due to the TWEW acquisition, and gross profit also increased by 10.8%, but net loss from continuing operations widened to $(1,266,437) from $(1,016,370) in the prior year, mainly due to increased general and administrative expenses and a shift from income tax benefits to expenses, while discontinued operations (parallel-import vehicles) reported a net loss of $(205,440) for the six months ended June 30, 2024, with no revenue in 2025 Consolidated Results of Operations (Continuing Operations) | Metric (Continuing Operations) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :----------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Revenues | $354,126 | $93,563 | $833,925 | $170,397 | | Cost of Revenues | $319,226 | $45,598 | $742,769 | $88,098 | | Gross Profit | $34,900 | $47,965 | $91,156 | $82,299 | | General and administrative expenses | $805,305 | $865,354 | $1,805,824 | $1,632,996 | | Share-based compensation expenses | $10,444 | — | $26,629 | — | | Interest income, net | $264,168 | $19,939 | $463,446 | $40,564 | | Income tax (benefits) | $12,987 | $(247,275) | $18,342 | $(492,989) | | Loss from continuing operations | $(512,528) | $(550,022) | $(1,266,437) | $(1,016,370) | - Revenue from Edward decreased by 32.4% for the six months ended June 30, 2025, due to a temporary suspension in U.S.-PRC ocean freight activities, partially offset by stabilized trade flow[200] - Revenue from TWEW contributed $718,726 (86.2% of total revenue) for the six months ended June 30, 2025, following its acquisition[199] - General and administrative expenses increased by 10.6% to $1.8 million for the six months ended June 30, 2025, driven by higher rental and lease expenses, personnel costs, and depreciation/amortization[206] - Interest income from continuing operations surged by 740.1% to $480,318 for the six months ended June 30, 2025, primarily from short-term loan receivables and certificates of deposit funded by public offerings[210] - Discontinued operations (parallel-import vehicle business) reported a net loss of approximately $205,440 for the six months ended June 30, 2024, with no revenue in 2025[219] Liquidity and Capital Resources The company's current assets were $9.9 million as of June 30, 2025, including $0.2 million in cash and cash equivalents and $8.7 million in loan receivables, with current liabilities totaling $0.9 million; net cash provided by operating activities was $1.3 million for the six months ended June 30, 2025, largely due to cash from discontinued operations, but investing activities used $2.7 million, primarily for loans to third parties, and financing activities used $0.1 million, a shift from providing $5.9 million in the prior year Key Liquidity Metrics (June 30, 2025) | Metric | Amount (USD) | | :---------------------- | :----------- | | Current assets | $9.9 million | | Cash and cash equivalents | $0.2 million | | Loan receivables | $8.7 million | | Current liabilities | $0.9 million | Cash Flow Summary (Six Months Ended June 30) | Cash Flow Activity | 2025 (Unaudited) | 2024 (Unaudited) | | :---------------------------------- | :--------------- | :--------------- | | Net cash provided by operating activities | $1,333,668 | $827,980 | | Net cash used in investing activities | $(2,661,150) | $(912,617) | | Net cash (used in) provided by financing activities | $(138,294) | $5,944,540 | - Net cash used in investing activities increased to approximately $2.7 million for the six months ended June 30, 2025, primarily due to $3.5 million in short-term loans made to third parties[228] - Net cash used in financing activities was $138,294 for the six months ended June 30, 2025, a significant change from $7.1 million provided in the prior year, which included proceeds from public offerings[231][232] Off-Balance Sheet Arrangements The company does not currently have any off-balance sheet financing arrangements or relationships with unconsolidated entities or financial partnerships for such purposes - The company does not have any off-balance sheet financing arrangements[234] Critical Accounting Policies There have been no material changes to the company's critical accounting estimates since the Annual Report - No material changes to critical accounting estimates since the Annual Report[235] Item 3. Quantitative and Qualitative Disclosures About Market Risk As a smaller reporting company, Cheetah Net Supply Chain Service Inc. is not required to provide quantitative and qualitative disclosures about market risk - As a smaller reporting company, the registrant is not required to provide quantitative and qualitative disclosures about market risk[237] Item 4. Controls and Procedures Management, under the supervision of its principal executive and financial officers, evaluated the effectiveness of disclosure controls and procedures as of June 30, 2025, and determined them to be ineffective at a reasonable assurance level, with no material changes occurring in internal control over financial reporting during the quarter - Disclosure controls and procedures were determined to be ineffective at a reasonable assurance level as of June 30, 2025[239] - No material changes occurred in internal control over financial reporting during the quarter ended June 30, 2025[240] PART II – OTHER INFORMATION This part covers legal proceedings, risk factors, equity sales, and other disclosures required for the quarterly report Item 1. Legal Proceedings The company is not currently involved in any material legal proceedings but anticipates involvement in ordinary course legal matters, which could result in material expenses or adverse financial impacts - The company is not currently involved in any material legal proceedings[242] - Anticipates involvement in legal proceedings, claims, and litigation arising in the ordinary course of business, which could have a material adverse effect on financial statements[242] Item 1A. Risk Factors As a smaller reporting company, Cheetah Net Supply Chain Service Inc. is not required to provide the information regarding risk factors - As a smaller reporting company, the registrant is not required to provide risk factor information[243] Item 2. Unregistered Sales of Equity Securities and Use of Proceeds The company completed two public offerings: the July Offering (404,979 Class A shares at $3.68/share, net proceeds $1.1 million) and the May Offering (825,625 Class A shares at $9.92/share, net proceeds $7.4 million), with proceeds from the July Offering partially used for the TWEW acquisition and strategically deployed into short-term loan arrangements to generate interest income, and May Offering proceeds fully used for working capital and general corporate purposes - July Offering: Issued 404,979 Class A common shares at $3.68/share, generating net proceeds of approximately $1.1 million[244][246] - July Offering proceeds: $200,000 used for the TWEW acquisition; remaining proceeds strategically deployed into short-term loan arrangements to generate interest income[246][247] - May Offering: Issued 825,625 Class A common shares at $9.92/share, generating net proceeds of approximately $7.4 million[248][250] - May Offering proceeds were fully used for working capital and other general corporate purposes[250] Item 3. Defaults Upon Senior Securities This item is not applicable to the company - Not applicable[251] Item 4. Mine Safety Disclosures This item is not applicable to the company - Not applicable[252] Item 5. Other Information There is no other information to report under this item - None[252] Item 6. Exhibits This section lists all exhibits filed as part of the quarterly report on Form 10-Q, including articles of incorporation, bylaws, specimen stock certificate, loan agreements, and certifications - Includes Fourth Amended and Restated Article of Incorporation, Bylaws, Specimen Stock Certificate, Loan Agreements, and Certifications (302 and 906)[255] SIGNATURES This section provides the official certification and signing of the quarterly report by authorized personnel - The report was signed by Huan Liu, Chief Executive Officer, Director, and Chairman of the Board of Directors, on August 4, 2025[259]