Cheetah Net Supply Chain Service Inc. Announces Second Quarter 2024 Results and Provides Corporate Update

Core Viewpoint - Cheetah Net Supply Chain Service Inc. is facing significant challenges in its parallel-import vehicle business due to adverse market conditions in the PRC, leading to a substantial decline in revenue and a strategic shift towards logistics and warehousing services [2][3]. Financial Performance - For the second quarter of 2024, total revenues were approximately $0.3 million, a drastic decrease from $12.2 million in the same quarter of 2023, primarily due to a 98.4% drop in revenue from parallel-import vehicles [4][9]. - The company sold only one vehicle in Q2 2024 compared to 93 vehicles in Q2 2023, resulting in vehicle sales revenue of $0.2 million versus $12.2 million in the prior year [2][4]. - The net loss for Q2 2024 was $0.6 million, contrasting with a net income of $0.2 million in Q2 2023 [8][12]. - For the first half of 2024, revenues totaled $1.8 million, down from $22.4 million in the same period last year, with only 14 vehicles sold compared to 175 in the previous year [9][10]. Cost Structure - The total cost of revenue from parallel-import vehicles sold decreased by approximately $10.8 million, or 98.0%, from $11.0 million in Q2 2023 to $0.2 million in Q2 2024 [5][10]. - The cost of revenue as a percentage of vehicle revenue was 107.8% in Q2 2024, indicating a loss on vehicle sales [5][10]. New Business Direction - The company is transitioning from the parallel-import vehicle business to become an integrated provider of international trade services and financing for small- and medium-sized traders, generating over $70,000 in warehousing and logistics revenue from non-vehicle-related wholesalers in Q2 2024 [2][3]. - The planned headquarters move from Charlotte, NC to Irvine, CA aims to enhance logistics operations and access to the Southern California market [2][3]. Liquidity and Cash Flow - As of June 30, 2024, the company reported cash of $6.3 million and working capital of approximately $12.4 million [13]. - The company is focused on improving liquidity through operational cash generation, debt financing, and potential equity financing if necessary [14].