Cheetah Net Supply Chain Service (CTNT) - 2025 Q3 - Quarterly Report

Revenue and Profitability - Total revenue for the three months ended September 30, 2025, was $361,935, a significant increase from $61,208 in the same period of 2024, representing a growth of 493%[9] - Gross profit for the nine months ended September 30, 2025, was $135,334, compared to $112,168 for the same period in 2024, reflecting an increase of 20.6%[9] - For the nine months ended September 30, 2025, total revenue from continuing operations was $1,195,860, an increase of 417% from $231,605 for the same period in 2024, primarily driven by the acquisition of TWEW in November 2024[58] - The Company reported revenues of $361,935 for the three months ended September 30, 2025, compared to $61,208 for the same period in 2024, representing a significant increase of 493%[171] - The cost of revenues for the three months ended September 30, 2025, was $317,757, up from $31,339 in the prior year, indicating a rise of 914%[171] - The Company recorded a gross profit of $44,178 for the three months ended September 30, 2025, representing 12.2% of total revenues, compared to 48.8% in 2024[190] Losses and Expenses - The company reported a net loss of $1,314,650 for the three months ended September 30, 2025, compared to a net loss of $1,815,292 in the same period of 2024, indicating a reduction in losses by 27.6%[9] - Operating expenses for the three months ended September 30, 2025, totaled $1,608,657, up from $1,364,120 in the same period of 2024, an increase of 17.9%[9] - The Company incurred a segment net loss of $1,314,650 for the three months ended September 30, 2025, compared to a loss of $694,211 for the same period in 2024, reflecting an increase in losses of 89%[171] - For the nine months ended September 30, 2025, the Company reported a net operating loss of approximately $2.6 million[23] - General and administrative expenses for the three and nine months ended September 30, 2025, were $801,263 and $2,607,087, respectively, compared to $1,102,454 and $2,735,450 for the same periods in 2024, indicating a decrease of 27% and 5%[60] Assets and Liabilities - Current assets decreased to $9,735,297 as of September 30, 2025, down from $11,037,072 as of December 31, 2024, a decline of 11.8%[8] - Total liabilities as of September 30, 2025, were $2,657,001, slightly down from $2,761,782 as of December 31, 2024, a decrease of 3.8%[8] - The company’s total assets decreased to $12,796,302 as of September 30, 2025, from $15,379,454 as of December 31, 2024, a decline of 16.8%[8] - The balance of stockholders' equity as of September 30, 2025, was $10,139,301, down from $11,879,948 as of March 31, 2025[11] Cash Flow and Financing - Total cash used in operating activities for continuing operations was $1,806,718 for the nine months ended September 30, 2025, compared to $2,921,549 in 2024[12] - The company reported a net cash decrease of $1,497,270 for the nine months ended September 30, 2025, compared to an increase of $4,854,378 in 2024[12] - The Company reported cash and cash equivalents of $153,692 at the end of the reporting period, down from $5,287,376 at the beginning of the year[12] - The Company entered into a one-year unsecured short-term loan agreement with Hongkong Sanyou Petroleum Co Limited for a principal amount of $500,000 at an annual interest rate of 12.0%[82] - The Company entered into multiple short-term loan agreements with Asia Finance Investment Limited, with principal amounts totaling $2,000,000 across various agreements, accruing interest at a monthly rate of 1.0%[87][88][89][90] Business Transformation and Strategy - The Company is shifting its business focus from parallel-import vehicle sales to logistics and warehousing services[20] - The Company dissolved its subsidiaries Allen-Boy, Pacific, and Logistics in March 2025 due to the discontinuation of the parallel-import vehicle business[16] - The Company has shifted its primary market focus to the U.S. domestic market since the first half of 2025, impacting its logistics services[151] - The Company has undergone a business transformation following the acquisitions of Edward and TWEW, which are still in the early development stage[154] Acquisitions - The acquisition of TWEW for $1.0 million included a $200,000 cash payment and Class A common stock valued at $800,000[15] - The Company acquired 100% of Edward for a gross purchase price of $1.5 million, consisting of $0.3 million in cash and 79,521 shares of Class A common stock valued at $1.2 million[120] - The Company entered into a stock purchase agreement on November 27, 2024, to acquire TWEW for a total purchase price of $1,000,000, including a cash payment of $200,000 and shares valued at $800,000[162] Impairment and Credit Losses - The Company recorded an impairment loss to goodwill of $568,532 for the nine months ended September 30, 2025, compared to nil for the same period in 2024[49] - The Company recorded a full valuation allowance against deferred tax assets as of September 30, 2025, due to a three-year cumulative pretax book loss and a forecasted loss for 2025[64] - The total allowance for credit loss for accounts receivable was $1.6 million for the year ended December 31, 2024, following a credit loss of $1.1 million recognized during the first three quarters of 2024[101] Market Challenges - The logistics and warehousing business may face challenges due to government policies on ocean freight and tariffs, potentially reducing market demand[32] - The Company is facing risks related to the shift from parallel-import vehicle sales to logistics services, influenced by political and economic conditions in the U.S. and PRC[188] Shareholder Information - The weighted average shares outstanding for the three months ended September 30, 2025, were 3,219,491, compared to 2,325,067 for the same period in 2024, an increase of 38.5%[9] - The Company approved a reverse stock split effective October 21, 2024, which adjusted all share information retrospectively in the quarterly report[161]